Answer:
The newly formed company must have following three resources as per the world economic forum research that Airbnb must acquire before starting a business:
Access to MarketsHuman ResourceFunding ResourcesExplanation:
The Access to Markets means you have access to wider customers either through distribution channels or marketing channels. The domestic demand of the product not only supports the company but will also help in developing product differentiation and increased foreign customers.
The Human Capital includes the talented employees that the company would require to solve its evolving problems with great creative ideas. The technical employees plays very important role at the start of the business. The management that manages the business operation are the second most important human resource for the company.
The startup that has Access to Funds can take better decisions because the decision totally differs when you have funds in hand. The reason is that when you have money in hand you will invest in better future and when you don't have money access then you will try to survive which means business growth is not possible without investment. It is the most difficult resource to obtain for a startup.
The formed company must have following three resources as per the world economic forum research that Airbnb must acquire before starting a business: Access to Markets, Human Resource and Funding Resources.
What are the three types of resources the founders of Airbnb?The Access to Markets means you have access to wider customers either through distribution channels or marketing channels.
The Human Capital includes the talented employees that the company would require to solve its evolving problems with great creative ideas.
The startup that has Access to Funds can take better decisions because the decision totally differs when you have funds in hand.
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You have gathered the following information on your investments. What is the expected return on the portfolio?
Stock Number of Shares Price per Share Expected Return
F 270 36 13.16%
G 295 22 9.85%
H 235 48 10.47%
a. 11.27%
b. 12.22%
c. 11.16%
d. 11.75%
e. 12.69%
Answer:
The correct option is a. 11.27%.
Explanation:
Note: See the attached excel file for the computation of the e expected return on the portfolio.
The expected return on the portfolio is the addition of the products of weight of each asset in the portfolio and the expected return of each asset.
From the attached excel file, the expected return on the portfolio is 11.27%. Therefore, the correct option is a. 11.27%.
A dean at NYU has a guaranteed salary of $120, 000 at the end of each year for the next five years at which point they are scheduled to retire. The school would like the dean to retire now. How much should the school offer today? Suppose current interest rates are 1.5% at all maturities.
Answer:
the school should offer $573,917.40 today.
Explanation:
The amount to be offered today is known as the Present Value and is calculated as :
Pmt = $120, 000
Fv = $0
P/yr = 1
n = 5
r = 1.5%
Pv = ?
Using a Financial Calculator, the amount that the school should offer today, PV is $573,917.40.
A company manufactures and sells x smartphones per week. The weekly price-demand and cost equations are p=500−0.5x and C(x)=20,000+135x respectively.
a. What price should the company charge for the phones and how many phones should be produced to maximize the weekly revenue? What is the maximum weekly revenue ?
b. What is the maximum weekly profit ? How much should the company charge for the phones, and how many phones should be produced to realize the maximum weekly profit ?
Answer:
a)
revenue = x amount of phones x price
revenue = x(500 - 0.5x)
revenue = 500x - 0.5x²
we find revenue' (derivative):
revenue' = 500 - x
x = 500
the company should sell 500 smartphones to maximize revenue, the selling price = 500 - (0.5 x 500) = $250 per smartphone. Maximum weekly revenue = $250 x 500 = $125,000
b)
profit = revenue - cost
profit = 500x - 0.5x² - 20,000 - 135x
profit = -0.5x² + 365x - 20,000
we must find profit' (derivative):
profit' = -x + 365
x = 365
In order to maximize profits, you have to sell 365 smartphones per week. Maximum weekly profit = -0.5(365²) + 365(365) - 20,000 = -66,612.50 + 133,225 - 20,000 = $46,612.50.
The smartphone's price = 500 - (0.5 x 365) = $317.50
You hold short positions of a stock and believe the price of the stock is going to decline within the next three months. However, you realize the stock price could increase and want to hedge that risk. Which one of the following option positions should you take to create the desired hedge? A) Buy a call B) Sell a call C) Buy a put D) Sell a put E) No option position will create the desired hedge
Answer: A) Buy a call
Explanation:
A Call Option is a derivative instrument where a person buys the option to be able to buy an asset at a set price. The call option therefore makes a profit if the price of the asset increases past the set (exercise ) price as the holder of the call option will be able to buy the asset for lower than it's market value.
If you believe that the price is likely to increase then you should buy a call option so that if it does increase, you can make a profit from the call option that would offset your loss from the short positions.
On July 23 of the current year, Dakota Mining Co. pays $6,165,600 for land estimated to contain 8,808,000 tons of recoverable ore. It installs machinery costing $1,849,680 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 488,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined.
Required:
Prepare entries to record the following:_______.
(a)To record the purchase of the land.
(b)To record the cost and installation of machinery.
(c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.
(d)To record the first five months' depreciation on the machinery.
Answer:
a) July 23, 202x, purchase of land parcel (for mining purposes)
Dr Land and ore deposits 6,165,600
Cr Cash 6,165,600
b) July 25, 202x, purchase and installation of mining machinery
Dr Machinery 1,849,680
Cr Cash 1,849,680
c) December 31, 202x, depleting expense of ore deposits
Dr Depleting expense 341,917
Cr Accumulated depletion: land and ore deposits 341,917
depleting expense = ($6,165,600 / 8,808,000 tons) x 488,500 tons = $341,917
d) December 31, 202x, depreciation expense of machinery
Dr Depreciation expense 102,585
Cr Accumulated depreciation: machinery 102,585
depreciation expense = ($1,849,680 / 8,808,000 tons) x 488,500 tons = $102,585
Ploeger Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.Sales (4,000 units) $ 240,000Variable expenses $156,000Contribution margin $84,000Fixed expenses $81,900Net operating income $2,100What is the break-even point for Ploeger Corporation in dollar sales?
Answer:
Break-even point (dollars)= $234,000
Explanation:
Giving the following information:
Sales (4,000 units) $240,000
Variable expenses $156,000
Fixed expenses $81,900
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 81,900/ [(240,000 - 156,000)/240,000]
Break-even point (dollars)= 81,900/0.35
Break-even point (dollars)= $234,000
g A corporation sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be:
Answer:
Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value, Common Stock $286,000.
Explanation:
The journal entry to record the given transaction is shown below:
Cash Dr (26,000 shares × $12) $312,000
To Common stock (26,000 shares × $1) $26,000
To Additional paid in capital in excess of par value - common stock $286,000
(Being the issuance of the common stock is recorded)
For recording we debited the cash as it increased the asset and credited the common stock and additional paid in capital as it also increased the equity
Suppose that M is fixed but that P falls. According to the quantity equation which of the following could both by themselves explain the decrease in P?
A. Y and V stay the same.
B. Y fell.
C. V rose.
D. V fell.
Answer:
D. V fell.
Explanation:
According to the quantity theory :
Money Supply x Velocity = Price x Output
If money supply is fixed, price is directly proportional to velocity.
If price fell, then velocity also fell.
V fell and Y rose
________systems can help keep logistics costs down, improve the satisfaction of customers, and help a firm become more competitive so as to grow its revenues.
a. Quality management
b. Relationship management
c. Integrated logictics management
d. Logistics
Answer:
c. Integrated logistics management
________systems can help keep logistics costs down, improve the satisfaction of customers, and help a firm become more competitive so as to grow its revenues.
Explanation:
How? Integrated logistics management systems interconnect and integrate all the activities and systems that affect the flow of materials, information, and goods from the point of origin to the point of arrival at the customers' end. An integrated logistics management system ensures that the six areas of logistics are handled seamlessly. These areas are Warehousing, Warehouse Management System, Transportation Management System, Real-Time Location System, Inventory Management System, and Reverse Logistics. With the integration of these systems and activities, the costs of logistics are drastically reduced, customers - who are at the center of these - become more satisfied, and the firm competitively grows its revenues and bottomline.
a. Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of $2 per share. If the stock is selling at $50 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If dividend growth forecasts for MBI are revised downward to 5% per year, what will be the price of the MBI stock? (Round your answer to 2 decimal places.) c. What (qualitatively) will happen to the company's price–earnings ratio? The P/E ratio will decrease. The P/E ratio will increase.
Answer:
a)
$50 = $2 / (16% - g)
16% - g = $2 / $50 = 4%
g = 16% - 4% = 12%
expected growth rate = 12%
b)
P₀ = $2 / (16% - 5%)
P₀ = $2 / 11%
P₀ = $18.18
c)
P/E ratio = share price / EPS
since the share price decreases from $50 to $18.18, the P/E ratio will decrease. When you are dividing a number, if the numerator decreases while the denominator remains still, the answer will decrease.
Growth rate in case 1 and Current Stock Price in case 2 are 12% and $18.18
Computation:
Case 1 ; Using Gordon's Model,
P = D1/(r - g)
50 = 2/(16% - g)
50 = 2/(0.16 - g)
0.16 - g = 2/50
0.16 - g = 0.04
g = 0.16 - 0.04
g = 0.12
Growth rate = 12%
Case 2 ; Using Gordon's Model,
P = D1/(r - g)
P = 2/(16% - 5%)
P = 2/(0.16 - 0.05)
Current Stock Price P = $18.18
Case 3;
Because the value of the shares has dropped, the P/E ratio has dropped as well. As a result, the P/E ratio will fall.
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Suppose you are tasked with designing a policy to lower emissions from automobile use. What type of policy (i.e. command and control standards, tradable permits, taxes, subsidies, liability, etc.) would you recommend and why
Answer:
Tradable permits
Explanation:
A tradable permit is a term that describes a market-based technique that provides the government with the chance or power to curb negative externalities produced by a group of companies.
In this situation, permits are traded among companies, whereby a company that has reduced production of the externality can trade permits to companies that are unable to make such reductions and are ready to pay for the permits.
Reason to recommend this Approach its policy:
It has been observed that, in every place where this approach or policy is used, the market for permits obtains the desired effect that is more profitable and productive for society
A copyright registered on or after January 1, 1978 lasts how long?
the author's life plus fifty years
the author's life plus sixty years
the author's life plus seventy years
the author's life
Answer:
Life of the author plus seventy years
Explanation:
Answer:
the author's life plus seventy years
Explanation:
A. At the garage, mechanics changed the
oil, fixed the brakes, and checked the
transmission
B. The delegates spent the day arguing
with each other rather than work together to
find common solutions.
C. Pat likes to jog, hiking, and playing
football
D. The production manager was asked to
write his report quickly, accurate, and in a
thorough manner.
Answer:
A. At the garage, mechanics changed the oil, fixed the brakes and checked the transmission.
Explanation:
Calculate the consumers' surplus at the indicated unit price p for the demand equation
p = 8−2q^1/3;p=6.
Answer:
consumer surplus = 0.5 cents
Explanation:
The unit price: p = 6 , demand equation = [tex]p = 8 - 2q^{\frac{1}{3} }[/tex]
first find the value of q by equating the unit price and the demand equation
[tex]8 - 2q^{\frac{1}{3} } = 6[/tex]
= 8 - 6 = 2q^1/3
hence q = 1
now the consumer surplus can be calculated by integrating and inputting all the values
[tex]Cs = \int\limits^1_0 {(8-2q^(1/3) )} \, dq - 6[/tex]
= [tex][ 8q - 2(\frac{(q^(4/3))}{4/3}) ] - 6[/tex] applying the limits of q = 1 , 0
Cs = 8 - 3/2 * ( 1 ) ^ 4/3 - 0 + 0 - 6
= 8 - 3/2 - 6 = 1/2 = 0.5 cents
If the price of a soda is $2, the price of a hamburger is $6, and George has $20 of income, George's utility maximizing combination of sodas and hamburgers per day is:
Answer:
2 hamburgers and 4 sodas
Explanation:
The utility's function was missing, so I looked for it:
Hamburgers per Day Total Utility Marginal Utility MU per $
1 30 30 5
2 52 22 3.67
3 67 15 2.5
4 76 9 1.5
5 80 4 0.67
Sodas per Day Total Utility Marginal Utility MU per $
1 20 20 10
2 35 15 7.5
3 47 12 6
4 57 10 5
5 64 7 3.5
If George wants to maximize his utility per dollar spent, he should buy 2 hamburgers and 4 sodas. This will yield him 52 utils (form hamburgers) and 57 utils (form sodas) = 109 utils per day
A company purchased a machine for $100,000. The accumulated depreciation on the machine is now $100,000. Which of the following statements is TRUE regarding the disposal of the machine for no cash proceeds?
A) There will be no gain or loss on the disposal.
B) The journal entry to record the disposal will decrease net assets.
C) The cost of the asset, but not its accumulated depreciation, must be removed from the books.
D) A gain or loss on the disposal can occur.
Answer:
A) There will be no gain or loss on the disposal.
Explanation:
Given that
Purchase value of a machine = $100,000
Accumulated depreciation = $100,000
Based on the above information
Since the purchase value is equivalent to the accumulated depreciation i.e. both the amount consist of $100,000
So at the time of sale of the machine no loss or gain should be there
Hence, the correct option is A.
Rex and Sandy are partners. Rex has a capital balance of and Sandy has a capital balance of . Marcus contributes a building with a fair market value of in order to acquire an interest in the partnership. What is Marcus's partnership share after he makes the investment? (Assume no bonus to any partner. Round the percentage to one decimal place.)
Answer:
25.29%
Explanation:
the numbers are missing, so I looked for a similar question:
Rex's capital balance = $370,000Sandy's capital balance = $280,000Marcus contributed a building worth = $220,000the partnership's total capital = $370,000 + $280,000 + $220,000 = $870,000
Marcus's share in the partnership = value of building / partnership's total capital = $220,000 / $870,000 = 25.29%
Baxter Inc. owns 90 percent of Wisconsin Inc. and 20 percent of Cleveland Company.
Wisconsin, in turn, holds 60 percent of Cleveland's outstanding stock.
No excess amortization resulted from these acquisitions.
During the current year, Cleveland sold a variety of inventory items to Wisconsin for $40,000 although the original cost was $30,000. Of this total, Wisconsin stll held $12,000 in inventory (at transfer price) at year-end.
During this same period, Wisconsin sold merchandise to Baxter for $100,000 although the original cost was only $70,000. At year-end, $40,000 of these goods (at the transfer price) was still on hand.
The initial value method was used to record each of these investments.
None of the companies holds any other investments.
Using the following seperate income statements, determine the figures thet would appear on a consoldated income statement:
Baxter Wisconsin Cleveland
Sales $(1,000,000) $(450,000) $(280,000)
Cost of goods sold 70,000 280,000 190,000
Expenses 110,000 60,000 30,000
Dividend income:
Wisconsin (36,000) 0 0
Cleveland (4,000) (12,000) 0
Net income $260,000 $122,000 $60,000
Consolidated Income Statement:
Sales
Cost of goods sold
Expenses
Dividend income
Non-controlling interests in subsidiaries' income
Controlling interest in consolidated net income
Answer:
$350,380
Explanation:
Calculation to determine the amount that would appear on the consolidated income
Consolidated income statement.
Sales$1,590,000
($1,000,000+$450,000+$280,000-$100,000-$40,000)
Less :Cost of goods sold ($1,015,000)
($670,000+$280,000+$190,000-$100,000-$25,000)
Less :Expenses ($200,000)
($110,000+$60,000+$30,000)
Dividend income$0
Consolidated net income $375,000
Noncontrolling interests in subsidiaries' income $24,620
Controlling interest in consolidated net income $350,380
Therefore the amount that would appear on the consolidated income will be $350,380
Assume a company pays out $100 in dividends in Year 1. What would the annual growth rate (rounded to the nearest 1%) for dividends have to be during years 2-5 so total dividends paid out during years 1-10 would be $2000
Answer:
The answer is "The dividends in 5 to 10 years will be the same".
Explanation:
The dividend value will be increasing in the 5 years after that it will be stabilized.
The growth rate value is = 24.24% , and the year dividend value in the form table can be defined as follows:
[tex]\boxed{\boxed{\bold{years}} \ \ \ \ \ \ \boxed{1}\ \ \ \ \ \boxed{2}\ \ \ \ \ \boxed{3} \ \ \ \ \ \boxed{4} \ \ \ \ \ \boxed{5} \ \ \ \ \ \boxed{6} \ \ \ \ \ \boxed{7} \ \ \ \ \ \boxed{8} \ \ \ \ \ \boxed{9} \ \ \ \ \ \boxed{10} }[/tex]
[tex]\boxed{\boxed{\bold{values}} \ \ \boxed{100}\ \ \boxed{124.2}\ \ \boxed{154.3} \ \ \boxed{191.8} \ \ \boxed{238.2}\ \ \boxed{238.2} \ \ \boxed{238.2} \ \ \boxed{238.2} \ \ \boxed{238.2} \ \ \boxed{238.2} }[/tex]In this question we use the goal seek function, that's calculation is defined in the attachment file. please find it.
After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $5,700 debit balance. This result implies that Cleaver earned a net income of $5,700.
a) true
b) false
Answer: False
Explanation:
The Income Summary Account contains the ending accounts of all revenue and expense accounts in a company with the net amount transferred to the account being the company's net profit (loss).
Income as an equity item is credited when it increases and debited when it decreases meaning that a debit represents a net loss. Cleaver Auto Services having a $5,700 debit balance in their Income summary account means that they have made losses of $5,700 not income.
For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total annual inventory (carrying and setup) cost is $400. What is the inventory carrying cost per unit per year for this item? $2.00 $3.00 $150.00 $1.00 not enough data to determin
Answer:
$2 per unit per year
Explanation:
The calculation of the inventory carrying cost per unit per year is shown below:
Inventory Carrying cost per unit per year is
= Total Annual Inventory cost ÷ Economic order quantity
= $400 ÷ 200 units
= $2 per unit per year
It is computed By dividing the total annual inventory cost from the economic order quantity, in order to get the inventory carrying cost
Therefore, the first option is correct
Which of the following is true of optional-product pricing? Question 11 options: 1) It involves setting geographically specific prices. 2) It involves pricing products that can be added to the base product. 3) It is used to price products that must be used with the company's main product. 4) It involves capitalizing on low value by-products. 5) It is used to price a company's main product.
Answer: 2) It involves pricing products that can be added to the base product.
Explanation:
Optional-product planning is a method of pricing where the producer lure buyers in by selling at a cheap price which can sometimes even fall below their cost price. These products however can not be fully utilized alone or as they are. They require accessories.
This is where the company hopes to make up the profit. They charge low on the main product, then hope to make up the cost when you buy the accessories. An example would be Printers and ink.
This is a risky method of selling and so needs the accessories to be priced in such a way that the company makes no losses.
Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6,400,000 on March 1, $5,280,000 on June 1, and $8,000,000 on December 31. Arlington Company borrowed $3,200,000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6,400,000 note payable and an 11%, 4-year, $12,000,000 note payable. What is the avoidable interest for Arlington Company?
Answer:
Avoidable interest for Arlington Company is $939,220
Explanation:
Arlington Company
Schedule of Weighted-Average accumulated expenditure
Date Amount Current year Weighted Average
capitalization Accumulated
period Expenditures
1-Mar $6,400,000 10/12 $5,333,333
1-Jun $5,280,000 7/12 $3,080,000
31-Dec $8,000,000 0/12 $0
Total $19,680,000. $8,413,333
Note: Weighted-Average accumulated expenditure = Amount * Current year capitalization period
Weighted average interest rate on general borrowings = 10% * (6,400,000 / 18,400,000) + 11%* (12,000,000 / 18,400,000)
=10.65%
Interest for specific borrowing should be capitalized for entire year.
Avoidable interest = ($3,200,000*12%) + ($8,413,333 - $3,200,000) * 10.65%
Avoidable interest = $939,220
Baylor Bank believes the New Zealand dollar will appreciate over the next five days from $.48 to $.50. The following annual interest rates apply:
Currency Lending Rate Borrowing Rate
Dollars 7.00% 7.50%
New Zealand dollar (NZ$) 6.75% 7.25%
Baylor Bank has the capacity to borrow either NZ$10 million or $5 million.
If Baylor Bank's forecast is correct, what will its dollar profit be from speculation over the five-day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)?
Answer:
Its dollar profit from speculation over the five-day period will be $208,035.93.
Explanation:
This can be determined as follows:
Assuming Baylor Bank borrow $5,000,000
The borrowing will be converted to New Zealand dollar at the current exchange rate and we will have:
Conversion = $5,000,000 / 0.48 = NZ$10,416,667
The NZ$10,416,667 shall be invested at an annualized based on New Zealand lending rate of 6.75% over five days. This will produce future value (FV) as follows:
FV of investment = Amount invested * (1 + NZ lending rate)^(5 years / 360 days) = NZ$10,416,667 * (1 + 6.75%)^(5 / 360) = NZ$10,426,121.44
Converting the NZ$10,426,121.44 to dollar at the new rate of $.50 as follows:
New conversion = NZ$10,426,121.44 * $.05 = $5,213,060.72
Amount to repay based on the US borrowing rate = Amount borrowed in USD * (1 + US borrowing rate)^(5 years / 360 days) = $5,000,000 * (1 + 7.5%)^(5 / 360) = $5,000,000 * 1.00100495826555 = $5,005,024.79
Profit = New conversion - Amount to repay = $5,213,060.72 - $5,005,024.79 = $208,035.93
Therefore, its dollar profit from speculation over the five-day period will be $208,035.93.
Considering the communication process, an advertisement of a particular copier machine model would be considered:
Answer: encoding
Explanation:
Considering the communication process, an advertisement of a particular copier machine model would be considered encoding.
Encoding simply helps in the translatation of the idea relgarding a message into symbols or words which should be easily understood by the receiver. The copier machine is sending tothe sender.
A bond with an annual coupon rate of 7.2% sells for $988.22. What is the bond’s current yield? (Round your answer to 2 decimal places.)
Answer:
7.29%
Explanation:
The computation of the current yield of the bond is shown below;
Current yield is
= (Par value × annual coupon rate) ÷ Selling price of the bond
= ($1,000 × 7.2%) ÷ $988.22
= $72 ÷ $988.22
= 7.29%
Hence, the bond current yield is 7.29%
This is to be computed by applying the above formula so that the current bond yield could arrive
PIRs (planned independent requirements) are calculated based on actual and forecasted sales.a) trueb) false
Answer:
A. True
Explanation:
Option A is correct because PIRs (planned independent requirements) are calculated based on actual and forecasted sales.
In PIR, the independent requirement for final goods is calculated by the sales and the activities /operation for material planning process.
_____ refer(s) to the sale of programs on a station-by-station, market-by-market basis.
a) Makegoods
b) Syndication
c) Dayparts
d) Spot announcement
e) Participation basis
Answer:
a) makegoods
Explanation:
Because I got it right
Answer:
i believe the answer is a
Explanation:
Tulip Inc. uses standard costing, and its manufacturing standards are as follows: 2 pounds of materials at $13 per pound, and 3 hours of labor at $10 per hour. Budgeted production last period was 5,000 units, and actual production was 4,800 units. Last period, Tulip purchased and used 9,800 pounds of materials for $135,000, and used 15,000 labor hours, costing $145,000. WHat is the journal entry to record direct labor costs to the costs of goods sold account
Answer:
Dr Work In Progress $144,000
Dr Direct Labor Cost Variance $1,000
Cr Wages Payable $145,000
Explanation:
The first step would be to calculate the direct labor variance which is calculated as under:
Direct Labor Cost Variance = Standard Labor Cost of Actual Production - Actual Labor Cost for Actual Production
Standard Labor Cost of Actual Production = Standard Labor Cost * Actual Production
Here
Actual Production is 4,800 Units and standard labor cost is 3 Hrs at $10 per hour which means:
Standard Labor Cost of Actual Production = 4,800 Units * 3 Hrs * $10 per Hr
= $144,000
Actual Labor Cost for Actual Production is $145,000
By putting the values in the above equation, we have:
Direct Labor Cost Variance = $144,000 - $145,000 = ($1,000) Unfavorable
The double entry would be:
Dr Work In Progress $144,000
Dr Direct Labor Cost Variance $1,000
Cr Wages Payable $145,000
The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product:
Actual Cost Standard Cost
Direct material 3,900 lbs. $5.30 4,000 lbs. $5.10
Direct labor 6,200 hrs, $8.40 6,000 hrs. $8.70
Determine the following variances:
Materials Variances
Actual cost:
Split cost:
Standard cost:
A. Materials price
B. Materials efficiency
Labor Variances
Actual cost:
Split cost:
Standard cost:
C. Labor rate
D. Labor efficiency
Answer:
Instructions are below.
Explanation:
Giving the following information:
Production= 4,000 units
Actual Cost Standard Cost
Direct material 3,900 lbs. $5.30 4,000 lbs. $5.10
Direct labor 6,200 hrs, $8.40 6,000 hrs. $8.70
To calculate the direct material price and efficiency variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (5.3 - 5.1)*4,000
Direct material price variance= $800 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (3,900 - 4,000)*5.3
Direct material quantity variance= $530 unfavorable
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (6,200 - 6,000)*8.4
Direct labor time (efficiency) variance= $1,680 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (8.4 - 8.7)*6,000
Direct labor rate variance= $1,800 unfavorable