Management may not be as committed to change or devoted to giving up resources that are needed to convert. Workers/managements may not be cooperative to the change.
mark me brainliestt :))
Prepare general journal entries to record the transactions below for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment:; Accounts Payable; Recording effects of K. Spade, Capital: K. Spade, Withdrawals; Fees Earned; and Rent Expense. Use the letters beside each transactions in T-accounts transaction to identify entries. After recording the transactions, post them to T-accounts, which serves as A the general ledger for this assignment. Determine the ending balance of each T-account.
a. Kacy Spade, owner, invested $100,750 cash in the company
b. The company purchased office supplies for $1,250 cash.
c. The company purchased S10,050 of office equipment on credit.
d. The company received S15,500 cash as fees for services provided to a customer.
e. The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c
f. The company billed a customer $2,700 as fees for services provided.
g. The company paid $1,225 cash for the monthly rent.
h. The company collected S1,125 cash as partial payment for the account receivable created in transaction f.
i. Kacy Spade withdrew $10.000 cash from the company for personal use.
Answer:
a. Cash (Dr.) $100,750
Capital (Cr.) $100,750
b. Office Supplies (Dr.) $1,250
Cash (Cr.) $1,250
c. Office equipment (Dr.) $10,050
Accounts Payable (Cr.) $10,050
d. Cash (Dr.) $15,500
Service revenue (Cr.) $15,500
e. Accounts Payable (Dr.) $10,050
Cash (Cr.) $10,050
f. Accounts Receivable (Dr.) $2,700
Service Revenue (Cr.) $2,700
g. Rent Expense (Dr.) $1,225
Cash (Cr.) $1,225
h. Cash (Dr.) $1,125
Accounts Receivable (Cr.) $1,125
i. Capital / Cash (Dr.) $10,000
Drawings (Cr.) $10,000
Explanation:
Trial Balance :
Debits :
Cash $104,850
Accounts Receivable $1,575
Office supplies $1,250
Office equipment $10,050
Rent expense $1,225
Total $118,950
Credits :
Accounts Payable 0
Service Revenue $18,200
Capital $90,750
Drawings $10,000
Total $118,950
A taxpayer's spouse dies in August of the current year. Which of the following is the taxpayer's filing status for the current year?
a. Single.
b. Qualified widow(er).
c. Married filing jointly.
d. Head of household.
Answer:
b. Married filling jointly
Explanation:
From the question we are informed about taxpayer's spouse who dies in August of the current year. In this case,
the taxpayer's filing status for the current year would be Married filling jointly. Joint return can be regarded as tax return which is been filed with the Internal Revenue Service by two married taxpayers that decide to have a filing status of "married filing jointly" or a widowed taxpayer that decide to have a filing status of " Qualifying Widow "A joint return give room for the
taxpayers to join their tax liability as well as report their income, credits and
deductions on the same joint return.
The joint return rates still validly
apply even two year after the death of a particular spouse, so far the
surviving spouse of the dead spouse does not remarry and still maintains a household as regards a dependent child.
Using the data below for Ace Guitar Company: Region A Region B Sales $786,500 $643,500 Cost of goods sold 298,900 244,500 Selling expenses 188,800 154,400 Service department expenses Purchasing $240,200 Payroll accounting 160,200 Allocate service department expenses proportionally to the sales of each region, determine the divisional income from operations for the Regions A and B. For interim calculations, round the percentages to one decimal place. Region A $fill in the blank 1 Region B $fill in the blank 2
Solution :
Calculation of income from operations
Sales Region A Region B
Cost of goods sold 643,500 786,500
Selling expenses 244,500 298,900
Service department expenses 154,400 188,800
Purchasing (working note - 1) 108,090 132,110
Payroll accounting (working note - 2) 72,090 88,110
Income from expenses $ 64,420 $ 78,580
Working note 1
Allocation of purchasing expenses:
A region = [tex]$240,200 \times \frac{643500}{(643500+786500)}$[/tex]
= $ 108,090
B region = [tex]$240,200 \times \frac{786500}{(643500+786500)}$[/tex]
= $ 132,110
Working note 2
Allocation of payroll accounting expenses.
A region = 160200 x 0.45 (sales ratio)
= $ 72,090
B region = 160,200 x 0.55 (sales ratio)
= $ 88,110
Hãy tính chi phí bình quân ? Chi phí biên ?
sorry u dont understand
2. What is dy/dx if y=6x'/12+0.4x
1 1.1 Briefly name and explain the aspects of the marking mix.
Answer: Marketing mix could described as methods taken by an organization to boast their brand or improve demand of product in the market.
Explanation:
Marketing mix could described as methods taken by an organization to boast their brand or improve demand of product in the market.
Aspects of marketing mix are Price, product, promotion and place.
Price; this refers to the value of a product. The organization in considering marketing mix would have to make her price affordable for the market in relation with the value of the product it's selling.
Product; this is the item being sold. The item must be valuable and worth the buy of the customers, this would improve consistent buying and referral by those who have already bought.
Promotion: this refers to actions taken to make known the product visibility in the market. This actions could be through branding, marketing with the aim of making the products demanded more than usual always.
Place: these is referred to as the target market. Every market is not a market, the place refers to those who are either already customers or would be customers. The organization must try to identify those who her products address and try selling to them.
Indicate how the following transactions affect the accounting equation.
a. The purchase of supplies on account.
b. The purchase of supplies for cash.
c. Payment of cash dividends to stockholders.
d. Revenues received in cash.
e. Sale made on account.
Answer:
Hopefully I understood the question correctly. Below is the affect on
assets-liabilities= owners equity
Explanation:
A. Increases assets, increases liabilty
b. Increases assets, decreases assets (a wash for assets)
c. Decreases owners equity, decreases assets
d. Increases owners equity, increases assets
e. Increases owners equity, increases assets
The Widget Co. can produce widgets according to the formula: q = 5K^3/4 L^1/4 where q is the output of widgets, and K, L are the quantities of capital and labor used.
a. Are there constant, increasing or decreasing returns to scale in widget production? Explain.
b. Are there, constant, increasing or decreasing marginal products of factors? Explain
c. In the short run, the amount of capital used by company A. is fixed. Derive the short-run cost function. (Note that the short-run cost function will show C as a function of Q, K and the factor prices w and r.)
d. Derive the long-run cost function.
Answer:
A) Constant Return to Scale
B) Decreasing Marginal Products
C) Short Run Cost Function = w*(Q/5)4 *(1/K`3) + rK`
D) (2Q/5)*(r3/4)*(w1/4)
Explanation:
A) Q(tL,tK) = 5*(tK)3/4*(tL)1/4
= t*Q(L,K)
Hence it exhibits constant return to scale
B) Here MPK = dQ/dK
= (3/4)* 5*L1/4*K-1/4
So dMPK/dK = (-3/16)*5*L1/4*K-5/4
Hence dMPK/dK < 0
thus exhibits decreasing Marginal Products
(Similarly for Labor also)
C) let K is fixed at K`
So Q = 5*K`3/4*L1/4
So L = (Q/5)4*(1/K`3)
So Short Run Cost Function = w*L + r*K`
C = w*(Q/5)4 *(1/K`3) + rK`
D) in long run, MRTS = MPL / MPK = w/r
So K/L = w/r
Thus rK = wL
So from production function
Q = 5*(wL/r)3/4*L1/4
= 5*(w/r)3/4*L
L* = (Q/5)*(r/w)3/4
similarly K* = (Q/5)*(w/r)1/4
so Long Run Cost Function = wL* + rK*
= (2Q/5)*(r3/4)*(w1/4)
Cullumber Corporation has announced that its net income for the year ended June 30, 2017, was $1,353,412. The company had EBITDA of $4,948,000, and its depreciation and amortization expense was equal to $1,128,000. The company's average tax rate is 34 percent. What was its interest expense
Answer:
See below
Explanation:
Net income = $1,353,412
Tax rate is 34% hence the company's EBT amount is calculated as
EBT = $1,353,412 / 0.66 = $2,050,624.24
Add back Depreciation and amortization to the EBT
= $2,050,624.24 + $1,128,000
= $3,178,624.24
The difference between the above and EBITDA amount will be the interest expense for the year
= $4,948,000 - $3,178,624.24
= $1,769,375.76
Therefore, the interest expense is $1,769,375.76
The bookkeeper for Concord Corporation asks you to prepare the following accrued adjusting entries at December 31.
1. Interest on notes payable of $400 is accrued.
2. Services performed but not recorded total $2,000.
3. Salaries earned by employees of $670 have not been recorded.
Use the following account titles: Service Revenue, Accounts Receivable, Interest Expense, Interest Payable, Salaries and Wages Expense, and Salaries and Wages Payable. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. Dec. 31 2. Dec. 31 3. Dec. 31 Click if you would like to Show Work for this question:
Answer:
No Date Account Titles and Explanation Debit Credit
1. Dec. 31 Interest expenses $400
Interest payable $400
(To record interest due on notes)
2. Dec. 31 Account receivable $2,000
Service revenue $2,000
(To record the service revenue earned)
3. Dec. 31 Salaries and wages expenses $670
Salaries and wages payable $670
(To record the alaries and wages expenses)
Which of the following statement completions is NOT CORRECT? For a profitable firm, when MACRS accelerated depreciation is compared to straight-line depreciation, MACRS accelerated allowances produce a. Lower tax payments in the earlier years of an asset's life. b. Larger total undiscounted profits from the project over the project's life. c. Higher depreciation charges in the early years of an asset's life. d. Smaller accounting profits in the early years, assuming the company uses the same depreciation method for tax and book purposes. e. Larger cash flows in the earlier years of an asset's life.
Answer:
The NOT CORRECT statement is:
b. Larger total undiscounted profits from the project over the project's life.
Explanation:
The MACRS (Modified Accelerated Cost Recovery System) apportions larger depreciation expense in the earlier years of the asset's life, as it attempts to depreciate higher cost in those earlier years than the later years. This implies that the accounting profits in the early years can only be smaller and the undiscounted profits cannot be larger over the project's life.
PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Mountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products:
Mountain Monster Desert Dragon
Sales price $5,400.00 $5,250.00
Variable cost of goods sold 3,285.00 3,400.00
Manufacturing margin $2,115.00 $1,850.00
Variable selling expenses 1,035.00 905
Contribution margin $1,080.00 $945.00
Fixed expenses 485 310
Income from operations $595.00 $635.00
In addition, the following sales unit volume information for the period is as follows:
Mountain Monster Desert Dragon
Sales unit volume 5,000 4,850
Required:
a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each.
b. What advice would you give to the management of PowerTrain Sports Inc. regarding the relative profitability of the two products?
Answer: See explanation
Explanation:
a. The contribution margin ratio for Mountain Monster will be:
Revenue = 5400 × 5000 = 27000000
Variable cost of goods sold = 3285 × 5000 = 16425000
Manufacturing margin = 2115 × 5000 = 10575000
Variable selling expense = 1035 × 5000 = 5175000
Contribution margin = 1080 × 5000 = 5400000
Contribution margin ratio = Contribution margin / Revenue = 5400000/27000000 = 0.2 = 20%
The contribution margin ratio for Desert Dragon will be:
Revenue = 5250 × 4850 = 25462500
Variable cost of goods sold = 3400 × 4850 = 16490000
Manufacturing margin = 1850 × 4850 = 8972500
Variable selling expense = 905 × 4850 = 4389250
Contribution margin = 945 × 4850 = 4583250
Contribution margin ratio = Contribution margin / Revenue = 4583250/25462500 = 0.18 = 18%
b. What advice would you give to the management of PowerTrain Sports Inc. regarding the relative profitability of the two products?
The Mountain Monster line provides the (larger) total contribution margin and the (larger) contribution margin ratio. If the sales mix were shifted more toward the (Mountain Monster) line, the overall profitability of the company would increase.
Jeff owns an American put option on 100 shares of ABC stock. The option has a strike price of $32.50 and a September expiration date. The stock has recently been declining in value, currently sells for $27.65 per share, and is expected to continue declining in value. Ignore all costs and taxes. If today is Wednesday, August 14, he: Group of answer choices
Answer: b. can exercise his option and earn a profit.
Explanation:
Put options make a profit when the underlying stock sells for less than the strike price of the option. Furthermore, an American put option can be sold at any time before the option expires.
Jeff can therefore exercise the put option and make a profit today of:
= (32.50 - 27.65) * 100 shares
= $485.00
XYZ pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. Budgeted cost of materials purchases in July is $256,550 and $278,050 in Aug. Total budgeted cash disbursements for materials purchases in August is:______.
A) S265,150
B) $153,930
C) $166,830
D) S111,220
Answer:
$265,150
Explanation:
Cost of material purchases in July
= 256,550 × 60/100
= 256,550×0.6
= 153,930
Cost of purchases in August
= 278,050×40/100
= 278,050×0.4
= 111,220
Total cash disbursement
= 111,220+153,930
= $265,150
tine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,500 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,500. During May, a summary of source documents reveals the following.
Job Number Materials Requisition Slips Labor Time Tickets
429 $2,500 $1,900
430 3,500 3,000
431 4,400 $10,400 7,600 $12,500
General use 800 1,200
$11,200 $13,700
Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 429 is completed during the month.
Required:
Prepare summary journal entries to record (1) the requisition slips, (2) the time tickets, (3) the assignment of manufacturing overhead to jobs, and (4) the completion of Job No. 429.
Answer:
1. Dr Work in Process Inventory $10,400
Dr Manufacturing Overhead $800
Cr Raw Materials Inventory $11,200
2. Dr Work in Process Inventory $12,500
Dr Manufacturing Overhead $1,200
Cr Factory Labor $13,700
3.Dr Work in Process Inventory $7,500
Cr Manufacturing Overhead $7,500
4. 31-May
Dr Finished Good Inventory $7,540
Cr Work in Process Inventory $7,540
Explanation:
1. Preparation of the summary journal entries to record (1) the requisition slips,
31-May
Dr Work in Process Inventory $10,400
Dr Manufacturing Overhead $800
Cr Raw Materials Inventory $11,200
(To record requisition slips)
2.Preparation of the summary journal entries to record the time tickets
31-May
Dr Work in Process Inventory $12,500
Dr Manufacturing Overhead $1,200
Cr Factory Labor $13,700
(To record t time tickets)
3. Preparation of the summary journal entries to record the assignment of manufacturing overhead to jobs
31-May
Dr Work in Process Inventory $7,500
($12,500*60%)
Cr Manufacturing Overhead $7,500
(To record assignment of manufacturing overhead to jobs)
4. Preparation of the summary journal entries to record the completion of Job No. 429.
31-May
Dr Finished Good Inventory $7,540
Cr Work in Process Inventory $7,540
($2,000+$2,500+$1,900+$1,140)
(To record the completion of Job No. 429)
Sean, age 37, wants to maximize his 2021 Roth IRA contribution and purchase as much Beyond Meat stock as possible. If BYND stock is trading at $10/share, and Sean is able to contribute the maximum in 2021 to his Roth, how many shares he can purchase
Since the BYND stock is trading at $10/share and he is able to contribute the maximum in 2021 to his Roth, then, the number of shares that he can purchase is 600 shares.
In 2020, the maximum contribution for age below 50 is $6,000.
Here, the price per share is $10.
Now, when he contributes $6,000 to Roth IRA, then, he can purchase 600 shares ($6,000 / $10 per shares) to maximize his earnings
In conclusion, the number of shares that he can purchase is 600 shares.
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Suzette is receiving $10,000 today, $15,000 one year from today, and $25,000 four years from today. She will immediately invest these funds for retirement. If she earns 9.6 percent on her investments, how much will she have in savings 30 years from today
Answer:
$641,547.38
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
We are to determine the future value of these cash flows. But to determine the future value, we need to determine the present value of the cash flows.
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
To find the PV using a financial calculator:
Cash flow in year 0 = $10,000
Cash flow in year 1 = $15,000
Cash flow in year 2 = 0
Cash flow in year 3 = 0
Cash flow in year 4 = $25,000
I = 9.6
PV = 41,012.11
FV : 41,012.11(1.096)^30 = $641,547.38
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
One investor is trying to derive the implied discount rate by comparing an annuity and an annuity due. Assume that the future value of the annuity is $49,081.00, and the future value of the annuity due is $52,169.00. All the other information regarding these two investments are similar, what's the implied discount rate
Answer:
the implied discount rate is 6.29%
Explanation:
The computation of the implied discount rate is shown below;
= (Future value of an annuity due ÷ future value of annuity) - 1
= ($52,169 ÷ $49,081) - 1
= 6.29%
Hence, the implied discount rate is 6.29%
We simply applied the above formula for the same and the same is relevant
Trust incurred $10,000 of portfolio income. Its corporate trustee paid fiduciary fees of $1,000 therefrom, and also paid $1,000 in premiums for a life insurance policy on Marcia, the grantor of the trust. How much gross income does Marcia include with respect to these trust activities?
A) $800.
B) $1,000.
C) $8,000.
D) $9,000.
E) $10,000.
Answer:
$1,000
Explanation:
Based on the information given the
GROSS INCOME amount that Marcia will include with respect to these trust activities will be the amount of $1,000 because we were told that the amount of $1,000 was paid in premiums for a LIFE INSURANCE POLICY ON MARCIA who is the GRANTOR OF THE TRUST, although The trust is not categorized as a grantor trust reason been that the TRUSTEE was authourized to pay the life insurance premiums
Financial leverage is defined as Multiple Choice the amount of equity used in the capital structure of the firm the amount of operating assets used in the capital structure of the firm the amount of current liabilities only used in the capital structure of the firm the amount of debt used in the capital structure of the firm
Answer:
the amount of debt used in the capital structure of the firm.
Explanation:
In Financial accounting, a leverage can be defined as a process which typically involves the use of fixed-charged assets or items in a business with the intention of multiplying potential financial gains and returns.
This ultimately implies that, a financial leverage is a measure of the total amount of debt (borrowed money) used in the capital structure of an organization or business firm. Also, the capital structure of a business firm comprises of the combination of various equities and liabilities used to finance the smooth operations of the business.
Basically, financial leverage which is also known as trading on equity, is the utilization of debt (borrowed money) to acquire or purchase new assets with the intent and expectation that the income generated from these assets would exceed the cost incurred from borrowing. Thus, a business that engages in financial leveraging assumes that it would generate a higher income or capital gain from the amount of debt (borrowed money) used in its capital structure.
Analysts estimate that a bond has a 40 percent probability of being priced at $950 and a 60 percent probability of being priced at $1,050 one year from today. The bond is also callable at any time at $1,010. What is the expected value of this bond in one year?
A) $1,000
B) $980
C) $1,010
D) $995
E) $986
Answer:
E) $986
Explanation:
The computation of the expected value of the bond in one year is shown below;
= (Probability × Price of bond) + (Probability × Callable price bond)
= (0.4 × $950) + (0.60 × $1,010)
= $986
Hence, the expected value of the bond in one year is $986
Therefore the correct option is E.
Suppose Abigail wants to buy a Porsche 911 Turbo, which currently costs $125,000, in 6 years. The price of the Porsche is expected to increase at 2% per year for the next 6 years. 5. If she wants to make equal annual deposits at the end of each of the next 6 years, how much must she deposit each year if the interest rate is 6% in order to have the necessary funds to purchase the car
Answer: $20,181.21
Explanation:
First find the value of the Porsche at the end of 6 years:
= Current price * ( 1 + growth rate) ^ number of years
= 125,000 * (1 + 2%) ⁶
= $140,770
Abigail needs to have $140,770 at the end of 6 years. She would need to deposit a certain amount every year to get to that amount. This amount would be an annuity because it is constant.
Future value of annuity = Annuity * Future value interest factor of annuity, 6 years, 6%
140,770 = Annuity * 6.9753
Annuity = 140,770 / 6.9753
= $20,181.21
Joanette, Inc., is considering the purchase... Joanette, Inc., is considering the purchase of a machine that would cost $460,000 and would last for 6 years, at the end of which, the machine would have a salvage value of $56,000. The machine would reduce labor and other costs by $116,000 per year. Additional working capital of $2,000 would be needed immediately, all of which would be recovered at the end of 6 years. The company requires a minimum pretax return of 17% on all investment projects. (Ignore income taxes.)
Required:
Determine the net present value of the project.
Answer:
The Net Present Value = - 23056.
Explanation:
A city uses an Enterprise Fund to provide electricity to its citizens and to its General Fund. A total of $50,000 was billed to the General Fund and collected 30 days later. Prepare the journal entries necessary to record these transactions, and label the fund(s) used.
Answer:
Enterprise Fund due from General Fund (Dr.) $50,000
Service Revenue (Cr.) $50,000
Explanation:
The enterprise used its general fund to provide electricity to the citizens. It has a collection period of 30 days for the general fund. This collection period is receivable duration during which company service revenue is to be collected. The general fund used by enterprise fund is collected 30 days later.
New Corp. issues 2,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to Group of answer choices Common Stock $20,000 and Paid-in Capital in Excess of Stated Value $8,000. Common Stock $28,000. Common Stock $20,000 and Paid-in Capital in Excess of Par $8,000. Common Stock $20,000 and Retained Earnings $8,000.
Answer:
Common Stock $20,000 and Paid-in Capital in Excess of Par $8,000.
Explanation:
The journal entry to record the issuance of the shares is given below:
Cash Dr (2000 shares × $14) $28,000
To Common stock (2000 × $10) $20,000
To Paid in capital in excess of par value (2000 × 4) $8,000
(being the issuance of the shares is recorded)
Here the cash is debited as it increased the assets and rest 2 account is credited as it also increased the equity
Scenario: Money Supply Changes II Charlotte withdraws $8,000 from her checkable bank deposit to pay tuition this semester. Assume that the reserve requirement is 20% and that banks do not hold excess reserves. As a result of the withdrawal, required reserves: don't change. decrease by $8,000. decrease by $1,600. decrease by $6,400.
Answer: decrease by $1,600
Explanation:
Charlotte withdraws $8,000 from her account. When she first paid in that $8,000, the bank had to keep some of it as a reserve requirement. That requirement was that they keep 20%.
Now that she is withdrawing the money, the bank would have to retrieve that 20% from the reserve requirement in order to give it back to Charlotte.
That 20% is:
= 20% * 8,000
= $1,600
The goods exported to Uruguay arrived at the port on the 12th day of this month. Today is the 15th, the bank informed that the customer had not redeemed the bill. We guess it may be the reason for the holidays, so the customer did not redeem in time. I wonder if the destination port will incur any expenses. What should we ask the bank to do with this issue?
Answer:
we should ask the bank for extra time
A company purchases land and a building for $300,000. The appraisal attributes a fair market value (FMV) to the land of $180,000 and to the building of $220,000. As a result, the building’s cost will be booked at:____________
Elizabeth is a highly-sought-after scientific researcher. She relocated to Europe ten years ago but is now returning to the United States. While the United States welcomes her skill level, there is also some concern regarding the contributions she made in Europe. This situation demonstrates the idea of:______.
1) groupthink.
2) reverse brain drain.
3) self-fulfilling prophecy.
4) brain drain.
Answer:
2
Explanation:
Reverse brain is a type of brain drain that occurs when a person moves from a more developed country to a less developed country. The knowledge, skills developed in the developing country can be used by the developed country from which she came from
Elizabeth moved from US (developed) to Europe (less developed). On returning to US, the government is concerned about accepting her contributions which she made in Europe
A company is interested in developing a quarterly aggregate production plan but they are not sure if a level strategy with backorders or a chase strategy would be better. They have the following information available regarding their production operation: Hiring Cost (per unit increase) $40 Firing (per unit decrease) $80 Inventory Cost (per unit) $40 Stockout (per unit) $150 Production (Labor) cost (per unit) $30 Subcontracting cost (per unit) $60 Previous quarter's production 1300 Previous quarter's ending inventory 0 Quarter forecasts are 4000, 3000, 4000 and 5000, respectively. Suppose that you want to use a level plan with backorders (one that produces at the average demand over the four quarters). What is the ending inventory in Quarter 2
Answer:
1000 units
Explanation:
Average demand over the next 4 quarters = (4000 + 3000 + 4000 + 5000) / 4
Average demand over the next 4 quarters = 16000 / 4
Average demand over the next 4 quarters = 4000
That is, as per the Level plan, 4000 units shall be produced in each of the next 4 quarters.
Quarter 1
Beginning Inventory = 0
Production = 4000
Demand = 4000
Ending Inventory = (Beginning Inventory + Production) - Demand
Ending Inventory = (0 + 4000) - 4000
Ending Inventory = 4000 - 4000
Ending Inventory = 0 units
Quarter 2
Beginning Inventory = 0
Production = 4000
Demand = 3000
Ending Inventory = (Beginning Inventory + Production) - Demand
Ending Inventory = (0 + 4000) - 3000
Ending Inventory = 4000 - 3000
Ending Inventory = 1000 units