Answer:
4
Explanation:
A person trades off one activity for the other when in order to carry out an activity one has to give up something
In order for Kyoko to swim, she has to take time away from work where she earns $11. This is what she trades off
A rational consumer would only trade off an activity for another only if the satisfaction derived would be greater than that of the activity traded off
Classify the transaction as either an operating activity, an investing activity, a financing activity, or a noncash activity:
1. Common stock is sold for cash
2. Bonds payable are issued for cash at a discount
3. Interest on a short-term note receivable is collected
4. Merchandise is sold to customers for cash
5. Cash paid to purchase inventory
Answer:
1. financing activity
2. financing activity
3. investing activity
4. operating activity
5. operating activity
Explanation:
Operating Activities includes Firms activities in sale and purchase of Inventory.
Investing Activities shows cash resulting from acquiring and sale of assets as well as receipt of interest on the investments.
Financing Activities shows cash resulting from raising capital or debt and the repayment of debt.
Assume that EEG Company wanted to reduce the cost of materials handling in each of its stores, and management set a target reduction of 2 percent per year. If a given store has current annual materials handling costs of $200,000 and expected an increase next year due to 15 percent growth, the budget for next year would be: A. $230,000 B. $216,000 C. $196,000 D. $225,400
Explain the nature of the exchange-rate risk for each of the following, from the perspective of the U.S. firm or person. In your answer, include whether each is a long or short position in foreign currency.
a. A small U.S. firm sold experimental computer components to a Japanese firm, and it will receive payment of 1 million yen in 60 days.
b. An American college student receives a birthday gift of Japanese government bonds worth 10 million yen, and the bonds mature in 60 days.
c. A U.S. firm must repay a yen loan, principal plus interest totaling 100 million yen, coming due in 60 days.
Answer:
a. U.S. firm has long position in yen since it has asset in yen.
b. An American student has long position in yen since it has asset of bonds in yen.
c. U.S. firm has liability position in yen, therefore it is short position.
Explanation:
a. The payment is to be received in next 60 days which means there is a risk of yen depreciation and then company will receive lower dollars. The company should hedge its exchange rate risk by selling yen now and buying dollars later.
b. The gift received in the form of bonds will mature in 60 days. There is uncertainty in dollar rate, if dollar appreciates against yen then student will receive less yen.
c. The dollar rate is unpredictable for yen in next 60 days. If yen appreciate then dollar will depreciate against yen and therefore amount of loan repayment will increase.
Farrick and Kenley want to form a business in which they invest money in exchange for stock ownership in their organization. What type of business entity do they wish to form
Answer:
Limited liability company
Explanation:
In simple words, A limited liability corporation (LLC) is a type of private company structure. It's among the most frequent legal structures for forming a company. In a comprehensive partnerships all members are accountable for the firm and have unlimited accountability for its obligations.
Thus the limited liability structure is most suitable for the two.
The benefits of portfolio diversification are highest when the individual securities have returns that Group of answer choices Are counter-cyclical Vary indirectly with the rest of the portfolio Are uncorrelated with the rest of the portfolio Vary directly with the rest of the portfolio
Answer:
Are uncorrelated with the rest of the portfolio
Explanation:
Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio
Non systemic risk are risks that can be diversified away. they are also called company specific risk. Examples of this type of risk is a manager engaging in fraudulent activities.
The highest benefit of diversification is when the securities are uncorrelated
Correlation is a statistical measure used to measure the relationship that exists between two variables.
1. Positive correlation : it mean that the two variables move in the same direction. If one variable increases, the other variable also increases.
For example, there should be a positive correlation between quantity supplied and price
When there is a positive correlation, the graph of the variables is upward sloping
2. Negative correlation : it mean that the two variables move in different direction. If one variable increases, the other variable decreases.
For example, there should be a negative correlation between quantity demanded and price
When there is a negative correlation, the graph of the variables is downward sloping
3. Zero correlation : there is no relationship between the variables
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $440,000; Allowance for Doubtful Accounts has a credit balance of $4,000; and sales for the year total $1,980,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $14,800.
Required:
a. Determine the amount of the adjusting entry for uncollectible accounts.
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
c. Determine the net realizable value of accounts receivable.
Answer: See explanation
Explanation:
a. The amount of the adjusting entry for uncollectible accounts will be:
= Estimated balance required in Allowance account - Unadjusted balance existing in Allowance account
= $14800 - $4000
= $10800
b. The adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense will be:
Account receivables = $440,000
Allowance for Doubtful accounts = $14,800
Bad Debt expense = $10800
c. The net realizable value of accounts receivable will be:
= Account receivables - Allowance for Doubtful accounts
= $440,000 - $14800
= $425200
Productivity is difficult to measure because precise units of measure are available, quality is consistent, and exogenous variables don't change. True False
Answer:
False
Explanation:
All of the statements being made are False. Productivity is measured by stats. For example, in any given month a certain number of products are produced by a fixed number of employees, the next month the same value is calculated and compared with the previous month. This lets you know if productivity is increasing or decreasing. The quality of anything depends on the time and effort being implemented in making something, if this changes then so does the quality. Exogenous variables are simply variables that are not affected by other variables in a given environment, this does not mean that they cannot change. Even though they are independent they can still change. For example, the weather is an exogenous variable but it can still change from Raining to Sunny.
The beginning inventory of BG Action Figures is understated by $7 million at December 31, 20x8. What is the effect on 20x8 cost of goods sold? Group of answer choices $7 million overstated $7 million understated no effect none of the above
Answer:
$7million understated
Explanation:
Based on the information given the effect on 20x8 COST OF GOODS SOLD will be UNDERSTATED by $7 million reasons been that since the OPENING INVENTORY IS UNDERSTATED by $7 million which means that the COST OF GOODS SOLD will as well be UNDERSTATED by the same amount based on the fact that opening inventory adds to Cost of goods sold.
The Gear Division makes a part with the following characteristics:
Production capacity 25,000 units
Selling price to outside customers $ 18
Variable cost per unit $ 11
Fixed cost, total $ 100,000
Motor Division of the same company would like to purchase 10,000 units each period from the Gear Division. The Motor Division now purchases the part from an outside supplier at a price of $17 each. Suppose that the Gear Division is operating at capacity and can sell all of its output to outside customers. If the Gear Division sells the parts to Motor Division at $17 per unit, the company as a whole will be:
a. better off by $10,000 each period.
b. worse off by $20,000 each period.
c. worse off by $10,000 each period.
d. There will be no change in the status of the company as a whole.
Answer:
Effect on income= -10,000
Explanation:
Giving the following information:
Production capacity 25,000 units
Selling price to outside customers $ 18
Variable cost per unit $ 11
Fixed cost, total $ 100,000
First, we need to calculate the unitary total production cost:
Total unitary cost= (100,000/25,000) + 11
Total unitary cost= $15
The company can sell all of its production to outside customers and gain $3 from the sale. But, by selling to the Motor Division, it gains $2.
Now, the effect on income:
Effect on income= increase in income by not buying the part - decrease in sales revenue for not selling to outside customers
Effect on income= 10,000*2 - 10,000*3
Effect on income= 20,000 - 30,000
Effect on income= -10,000
A loan processing operation that processes an average of 7 loans per day. The operation has a design capacity of 10 loans per day and an effective capacity of 8 loans per day. A furnace repair team that services an average of 3 furnaces a day if the design capacity is 9 furnaces a day and the effective capacity is 8 furnaces a day.
a. Utilization ____________ %
b. Efficiency ____________ %
Would you say that systems that have higher efficiency ratios than other systems will always have higher utilization ratios than those other systems?
Answer:
Efficiency = Actual Output / Effective Capacity * 100%
Utilization = Actual Output / Design Capacity * 100%
Loan processing operation
Actual output = 9 loans per day
Design capacity = 10 loans per day
Effective capacity = 8 loans per day
Utilization = 9/10 * 100
Utilization = 90.0%
Efficiency = 9/8 x 100
Efficiency = 112.5%
Furnace repair team
Actual output = 3 furnaces per day
Design capacity = 9 furnaces per day
Effective capacity = 8 furnaces per day
Utilization = 3/9 * 100
Utilization = 33.3%
Efficiency = 3/8 * 100
Efficiency = 37.5 %
Assume a market for a normal good is currently in equilibrium. If the government increases the taxes that firms must pay, then:
Answer:
The supply will decrease.
Explanation:
The supply will decrease because the application of taxes will make selling costly. Thus, when cost increases then producers supply less. Therefore, less quantity will be supplied in the market when tax is imposed and this will increase the prices of products.
The short-run elasticity of demand for gasoline sold at gasoline stations is 0.20. If terrorism causes the supply of gasoline to fall, resulting in a 5 percent drop in quantity, if other things remain the same, the price per gallon will increase by:___________
Answer:
25%
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = percentage change in quantity supplied / percentage change in price
0.2 =5% / percentage change in price
percentage change in price = 5/0.2 = 25%
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
Supply is inelastic if a small change in price has little or no effect on quantity supplied. The absolute value of elasticity would be less than one
Supply is unit elastic if a small change in price has an equal and proportionate effect on quantity supplied.
South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $55,000 in 2015, $60,000 in 2016, and $65,000 in 2017. South Carolina's pretax financial income for 2014 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2014.Instructions(a) Compute taxable income and income taxes payable for 2014.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.(c) Prepare the income tax expense section of the income statement for 2014, beginning with the line ?Income before income taxes.?
Answer:
Following are the solution to the given question:
Explanation:
For point a:
Calculating taxable income tax payable in accordance with the following figures:
[tex]Particulars \ \ \ \ \ \ \ \ \ 2017 \ \ \ \ \ \ \ \ \ 2016 \ \ \ \ \ \ \ \ \ 2015 \ \ \ \ \ \ \ \ \ 2014\\\\\text{Pre- tax financial income} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 300,000\\\\\text{Future taxable amounts}\\\\2014 =-(65 000+60 000+55,000) \ \ \ \ \ 65,000 \ \ \ \ \ \ 60,000 \ \ \ \ \ \ \ 55,000 \ \ \ \ \ -180,000\\\\\text{Taxable income for 2014} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 120,000[/tex][tex]\text{Income tax payable} \\\\ (120,000 \times 30 \%) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\\[/tex]
For point b:
Following are the journal:
[tex]Date \ \ \ \ \ \ \text{Account Titles and Explanation} \ \ \ \ \ \ \ \ \ \ \ Dr \ \ \ \ \ \ \ \ \ \ \ Cr\\\\[/tex]
[tex]\text{Income tax expense} \ (36,000 + 90,000)\ \ \ \ \ \ 90,000 \\\\[/tex]
[tex]\text{Income tax payable} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\[/tex]
Deferred tax liability [tex]\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 54,000\\\\[/tex]
[tex]\text{(To record the income tax expense)}\\\\[/tex]
Calculating the deferred tax liability:
[tex]Particulars \ \ \ \ \ \ \ \ \ \ \ \ 2017 \ \ \ \ \ \ \ \ \ \ \ 2016 \ \ \ \ \ \ \ \ \ \ \ 2015 \ \ \ \ \ \ \ \ \ \ \ \ Total\\\\\text{Future taxable anlounts} \ \ \ \ \ \ \ 65,00 \ \ \ \ \ \ \ 60,000 \ \ \ \ \ \ \ 55,000 \ \ \ \ \ \ \ 180,000\\\\\text{Tax rate} \ \ \ \ \ \ \ \ \ 30\% \ \ \ \ \ \ \ \ \ \ 30\% \ \ \ \ \ \ \ \ \ \ 30\% \\\\[/tex]
Deferred tax liability [tex]\ \ \ \ \ \ \ \ \ 192500 \ \ \ \ \ \ \ \ \ \ 18,000 \ \ \ \ \ \ \ \ \ 16,500 \ \ \ \ \ \ \ \ \ \ 54,000[/tex]
For point c:
Following are the preparation of the income tax section for the income statement session 2014:
[tex]\text{Income before income taxes} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 300,000\\\\ \text{Income tax expense} \\\\[/tex]
[tex]Current \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\\[/tex]
Defensed [tex]\ 54,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 90,000\\\\[/tex]
[tex]Net\ \ income \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 210,000[/tex]
Mannix Corporation stock currently sells for $80 per share. The market requires a return of 10 percent on the firm's stock. If the company maintains a constant 6 percent growth rate in dividends, what was the most recent dividend per share paid on the stock
Answer: $3.02
Explanation:
The Gordon growth method can help solve this:
Formula is:
Price of stock = (Most recent dividend * (1 + growth rate)) / (required return - growth rate)
80 = ( D * ( 1 + 6%)) / (10% - 6%)
80 = 1.06D / 4%
1.06D = 80 * 4%
D = 3.2 / 1.06
D = $3.02
To urban-dwelling, educated tech-savvy consumers, when they use Zipcar, car-sharing service, instead of owning a car, they save money while reducing their carbon footprint. What is effective about this position statement?
Answer: It addresses all five key elements of an effective position statement.
Explanation:
In this scenario, the most effective thing about this position statement is that it addresses all the five key elements of an effective position statement.
The target market is identified, the category of customers which are the prospective customers is identified as well. The company's differentiators as well as the mission and vision is also in effect.
MLX has annual sales of $320 million per year and has calculated the collection float to be 12 days. If MLX is currently paying 9.35% on its line of credit, what amount of interest expense could be saved if the collection float is reduced by 3 days? (Assume 365 days per year.
Answer:
The right solution is "$245,917.81".
Explanation:
According to the question,
Interest,
= 9.35%
Sales,
= 320000000
Float reduction,
= 3
Now,
Saving in interest will be:
= [tex]Sales\times Interest\times \frac{Float \ reduction}{365}[/tex]
By substituting the values, we get
= [tex]320000000\times 9.35 \ percent\times \frac{3}{365}[/tex]
= [tex]245,917.81[/tex] ($)
Bims Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 2,400 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 62,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 20,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month
Answer:
56,400 units
Explanation:
The computation of the equivalent units for conversion costs in the Assembly Department is given below:
But the transferred units is
= Beginning work in process inventory units + additional units - ending work in process inventory units
= 2,400 units + 62,000 units - 20,000 units
= 44,400 units
Now the equivalent units for conversion costs equal to
= Transferred units × percentage of completion + ending work in process inventory units × percentage of completion
= 44,400 units × 100% + 20,000 units ×60%
= 44,400 units + 12,000 units
= 56,400 units
bank holds $10 for every $100 in deposits. The bank wants to hold $9 for every $100 in deposits. The bank holds desired reserves of $7 comma 000 and actual reserves of $12 comma 000 . What is the actual reserve ratio, the desired reserve ratio, and the excess reserves ?
Answer:
Actual reserve ratio = Money that bank holds per deposit
= 10 / 100
= 10%
Desired reserve ratio = Money banks wants to hold per deposit
= 9 / 100
= 9%
Excess reserves = Actual reserves - desired reserves
= 12,000 - 7,000
= $5,000
If the unemployment rate is 5.8% and the number of unemployed persons is 15 million, the labor force is approximately:___________A. 258 million.B. 25.8 million.C. 87 million.D. 870 million.E. 2.6 million.
Answer: 258 million
Explanation:
The labor force refers to the number of people who are employed and the unemployed who are also looking for work.
Let the labor force be represented by x. Based on the question given, we can form an equation which will be:
5.8% of x = 15 million
0.058x = 15 million
x = 15million / 0.058
x = 258 million
Therefore, the labor force is approximately 258 million.
Given the following information, determine the activity rate for setups.
Activity Pool Activity Base Budgeted Amount
Setups 10,000 $180,000
Inspections 24,000 $120,000
Assembly (DLH) 80,000 $400,000
a. $58.00
b. $0.75
c. $5.09
d. $18
Answer:
Set up= $18 per set up
Explanation:
Giving the following information:
Activity Pool Activity Base Budgeted Amount
Setups 10,000 $180,000
To calculate the activity rate, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Set up= 180,000 / 10,000
Set up= $18 per set up
would you recommend that accountants wait until collections are made from customers before recording sales revenue
Answer: No
Explanation:
Accounting currently uses the Accrual basis and this is the best basis to use so far because it records revenue when they are earned not when the actual money comes in.
In doing this, the company is able to properly ascertain the revenue that it made in a particular period. If a company were to wait until collections were made, the company might wait for over one period to record their sales which would not be very helpful in calculating income for the period.
Also if companies waited to record only after sales, people not paying and becoming doubtful debts become a headache to record.
Markung's Co. is 100% equity-financed company (no debt or preferred stock); hence, its WACC equals it cost of common equality. Markung's Co.'s retained earnings will be sufficient to fund its capital budget in the foreseeable future. The company has a beta of 1.50, the risk-free rate is 5.0%, and the market return is 6.5%. What is Markung's Co.'s cost of equity?
Markung's Co. is financed exclusively using equity funding and has a cost of equity of 12.55%. It is considering the following projects for investment next year:
Project Required Investment Expected rate of return
W $22,450 13.10%
X $12,750 10.10%
Y $19,235 13.60%
Z $17,875 14.60%
Each Project has average risk, and Markung’s Co. accepts any project whose expected rate of return exceeds its cost of capital. How large should next year’s capital budget be?
Answer:
Markung Cost of Equity:
For this you should use the Capital Asset Pricing Model:
Cost of equity = Risk free rate + Beta * (Market return - Risk free rate)
= 5% + 1.50 * (6.5% - 5%)
= 7.25%
Total capital budget:
They will only pick projects with a rate of return that is higher than 12.55%:
= Project W + Project Y + Project Z
= 22,450 + 19,235 + 17,875
= $59,560
By representing the budget and schedule associated with each task, the Performance Measurement Baseline (PMB) allows program managers to ___________________. Reduce overall life cycle costs Complete projects on time Compare the value of work performed to actual costs Complete comparative analyses more efficiently
Answer:
Option C (Compare......actual costs) is the correct alternative.
Explanation:
The benchmark establishing performance measurements takes place just at beginning of the assignment to monitor the construction process.Three restrictions exist, notably timeframe, scope as well as money. Benchmark employee performance simply monitors the implementation with these restrictions. This enables system management to identify discrepancies promptly.The situation presented is not connected to other alternatives. This is the solution, therefore.
14.With earned value management (EVM), the Government can determine if a program is currently experiencing a/n
Answer: cost or schedule variance
Explanation:
Earned value management, refers to the project management technique that's used for the measurement of project progress and performance.
Earned value management integrates the cost, schedule, and scope in the measurement of project performance and this can be used by the government to determine if a program is currently experiencing a cost or schedule variance.
Fern, Inc., Ivy, Inc., and Jeremy formed a general partnership. Fern owns a 50% interest, and Ivy and Jeremy both own 25% interests. Fern, Inc. files its tax return on an October 31 year-end; Ivy, Inc., files with a May 31 year-end, and Jeremy is a calendar year taxpayer. Which of the following statements is true regarding the taxable year the partnership can choose?
A) The partnership must choose the calendar year because it has no principal partners.
B) The partnership must choose an October year-end because Fern, Inc., is a principal partner.
C) The partnership can request permission from the IRS to use a January 31 fiscal year under § 444.
D) The partnership must use the "least aggregate deferral" method to determine its "required" taxable year.
E) None of the above items are true.
Answer: D) The partnership must use the "least aggregate deferral" method to determine its "required" taxable year.
Explanation:
The Least Aggregate Deferral rule is used when neither of the partners can enforce their taxable year on the others because there is no dominant partner as is the case here because no shareholder has more than 50% ownership and the tax years of the partners are not aligned.
The partnership will have to use the "Least Aggregate Deferral" method when the above happens which is based on the percentage of profits for each partner.
One thousand dollars is invested at 5% continuous annual interest. this means the value of the investment will grow exponentially, with k equaling the decimal rate of interest. What will the value of the investment be after 7 1/2 years?
a. $1, 375.00.
b. $375.00.
c. $1, 454.99.
d. $454.99.
Navajo Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer with a fair value of $3,300. Navajo also paid $500 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)
Answer and Explanation:
The journal entry is given below:
Equipment/Computer $3,300
Accumulated depreciation-Truck $18,000
To Truck $20,000
To Gain on disposal of truck $800
To Cash $500
(Being the exchange is recorded)
Here the equipment and accumulated depreciation is debited as it increased the asset and credited the truck, cash and gain as it decreased the assets and increased the revenue
Consider golfers who led the Professional Golfers' Association of America (PGA) in winnings at different points in time. Note that the winnings are nominal figures (unadjusted for inflation).
Year Golfer Nominal Winnings (Dollars) U.S. CPI (1983 = 100) Winnings in 2009 Dollars
1965 Jack Nicklaus 140,752 31.5
1970 Lee Trevino 157,037 38.8
1982 Craig Stadler 446,462 96.5
2009 Tiger Woods 10,508,163 214.5 10,508,163
Fill in the missing values in the table above.
Answer:
Professional Golfers' Association of America (PGA)
Winnings at Different Points in Time
Year Golfer Nominal U.S. CPI Winnings
Winnings (Dollars) (1983 = 100) in 2009 Dollars
1965 Jack Nicklaus 140,752 31.5 958,454
1970 Lee Trevino 157,037 38.8 868,156
1982 Craig Stadler 446,462 96.5 992,395
2009 Tiger Woods 10,508,163 214.5 10,508,163
Explanation:
a) Data and Calculations:
Year Golfer Nominal U.S. CPI Winnings
Winnings (Dollars) (1983 = 100) in 2009 Dollars
1965 Jack Nicklaus 140,752 31.5
1970 Lee Trevino 157,037 38.8
1982 Craig Stadler 446,462 96.5
2009 Tiger Woods 10,508,163 214.5 10,508,163
Calculating the missing values:
Year Golfer Nominal U.S. CPI Winnings
Winnings (Dollars) (1983 = 100) in 2009 Dollars
1965 Jack Nicklaus 140,752 31.5 958,454 (140,752*214.5/31.5)
1970 Lee Trevino 157,037 38.8 868,156 (157,037*214.5/38.8)
1982 Craig Stadler 446,462 96.5 992,395 (446,462*214.5/96.5)
2009 Tiger Woods 10,508,163 214.5 10,508,163
The standard amount of materials required to make one unit of Product Q is 4 pounds. Tusa's static budget showed a planned production of 6,200 units. During the period, the company actually produced 6,300 units of product. The actual amount of materials used averaged 3.9 pounds per unit. The standard price of material is $2 per pound. Based on this information, the materials usage variance was:\
Answer: $1,260 Favorable
Explanation:
Material usage variance = (Standard quantity of materials actually produced - Actual quantity of materials actually produced) * Standard price of material
= [ ( 4 * 6,300 ) - (3.9 * 6,300) ] * 2
= [ 25,200 - 24,570 ] * 2
= 630 * 2
= $1,260 Favorable
A rate-making method designed to adjust a premium to reflect the actual loss experience of an insured during the policy period is known as:_______.
a. retrospective rating,
b. experience rating,
c. premium discount,
d. all of the above
Answer:
a. retrospective rating
Explanation:
Retrospective Rating can be regarded as a rating plan which is able to give
adjustments to it's premium, this rating can be subjected to a certain minimum as well as maximum, the rating is able to reflect or state the current loss experience of the insured. This rating give combination of actual losses as well as graded expenses so that produce a premium that reflects the current experience of the insured accurately can be produced. It should be noted that retrospective rating is a rate-making method designed to adjust a premium to reflect the actual loss experience of an insured during the policy period