Answer:
$3675
Explanation:
Interest = principal x interest rate x year
= $42,000 x 0.0875 x 1 = $3675
A government bond with a coupon rate of 7% makes semiannual coupon payments on January 15 and July 15 of each year. The Wall Street Journal reports the asked price for the bond on January 30 at $1,001.25. What is the invoice price of the bond? The coupon period has 182 days.
Answer:
invoice price (dirty price) = $1,004.13
Explanation:
semi-annual coupon = $1,000 x 7% x 1/2 = $35
clean price = $1,001.25
accrued interest = (Jan. 30 - Jan. 15) x $35 x 1/182 = $2.88
invoice price (dirty price) = clean price + accrued interest = $1,001.25 + $2.88 = $1,004.13
the dirty price or invoice price of a bond includes any accrued interest that the bond may have earned in the period between the last coupon payment and the transaction date.
A customer purchases $100,000 of corporate bonds at 40% in a margin account. The customer must deposit:__________
A. $2,000
B. $7,000
C. $8,000
D. $20,000
The next three questions refer to Jimmy Choo shoes, who sells 100,000 pairs of shoes to boutiques across the country:
The following cost information pertains to the shoes
Leather and metals: $25/pair
Shoe boxes: $1/pair
Shoemaker wages: $10/pair
Advertising & promotion: $200,000
Executive Salaries $300,000
Selling price to boutique: $100.00
a. What is the per unit gross marketing contribution?
1. 100%
2. 62%
3. 64%
4. None of the above
b. If they decided they wanted to invest in a $75,000 advertising campaign in the hopes of generating more sales, how many more pairs of shoes would they have to sell to maintain their current contribution to the organization?
1. 1,210
2. 925
3. 1,172
4. None of the above
c. By what percent does this change in sales represent?
1. 0.93%
2. 1.21%
3. 1.17%
4. None of the above
Answer:
Jimmy Choo
a. 4. None of the above
b. 3. 1,172
c. 4. None of the above
Explanation:
1) Data and Calculations:
Leather and metals: $25/pair
Shoe boxes: $1/pair
Shoemaker wages: $10/pair
Variable costs = $36/pair
Selling price to boutique: $100.00
Contribution = $64/pair
2) Fixed Costs and Profit:
Advertising & promotion: $200,000
Executive Salaries $300,000
Total fixed costs = $500,000
Net profit = $140,000
3) Per unit gross marketing contribution:
Marketing cost per unit = $2 ($200,000/100,000 units)
Gross marketing contribution = $64/$2 = 3200%
4) Increase fixed costs by $75,000 to $575,000
Sales unit to sell = Fixed costs + profit/contribution margin per unit
= $575,000 + 140,000 /$64
= 1,172
5) Change in sales:
Change = 1,172 - 1,000 = 172
Percentage change = 172/1,000 x 100 = 17.2%
Jimmy Choo is the most famous designer and famed for his handcrafted shoes.
Given data:
Leather and metals = $25/pairShoe-boxes = $1/pair Wage of shoemaker = $10/pairVariable pricing= $36/pairSelling price = $100.00Contribution = $64/paira. Option 4. None of the above
Per unit gross marketing contribution can be explained by:
Marketing cost per unit = [tex]\dfrac{\$200,000}{100,000 \text{units}} = \$ 2[/tex]Gross marketing contribution = [tex]\dfrac{\$64}{\$2} \times 100\% = 3200\%[/tex]b. Option 3. 1,172
Advertising & promotion: $200,000Executive Salaries = $300,000Total fixed costs = $500,000Net profit = $140,000Fixed cost increased by $75,000 to $575,000
[tex]\text{Sales unit to sell} & = \text{Fixed costs} +\dfrac{\text{profit}}{\text{contribution margin per unit}}[/tex]
[tex]\text{Sales unit to sell} & = \text{\$575,000} +\dfrac{\text{140,000}}{\text{\$ 64}}[/tex]
= 1,172 units
c. Option 4. None of the above
Change in sales can be estimated by:
Change = 1,172 - 1,000 = 172
[tex]\text{Percentage change} = \dfrac{172}{1,000 } \times 100 = 17.2 \; \%[/tex]
To learn more about gross marketing and sales estimation follow the link:
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Determine whether each of the following examples would be included in Gross Domestic Product (GDP). a. When Judy went to the grocery store yesterday, she bought three pounds of potatoes. Judy's purchase of potatoes (Click to select) . b. Ford Motor Company buys four tires to put on a new Ford Mustang. The purchase of the tires (Click to select) . c. The U.S. Air Force purchases two new fighter jets from Boeing. The purchase of the two fighter jets (Click to select) . d. When Joey had his birthday last week, his grandmother sent him a $100 bill that he could spend.
Answer:
Items included in GDP
Judy's purchase of potatoes
The purchase of the two fighter jets
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
Judy's purchase would be included as part of consumption spending by households on non durable items.
The purchase of the tires would not be included in the calculation of GDP because the tires are intermediate goods. Only final goods are included in the purchase of GDP
The purchase of the two fighter jets would be included in GDP as part of government spending
the $100 gift would not be included in the calculation of GDP
The payments you make on your automobile loan are given in terms of dollars. As prices rise you notice you give up fewer goods to make your payments. _____________
Answer:
Explanation:
The scenario in this question happens because the dollar amount you pay for the loan is a nominal value, meaning the face value of when it was issued and not its market value. While the number of goods you give up is a real value. In other words, the goods you give up have a real value which is adjusted for inflation and is measured based on the value of other items. Which is why you notice giving up fewer goods because they are worth more every time.
Based upon the following data, which of the following mutually exclusive projects should you choose if your required return is 10%?
Year Investment A Investment B
0 -$150 -$150
1 80 40
2 40 50
3 40 60
4 30 55
A. Investment A with an NPV of 633%.
B. Investment B with an NPV of 6.33%.
C. Investment A with an NPV of 10.33%.
D. Investment B with an NPV of 10.33%.
E. Both projects since they have positive NPV's.
Answer:
d
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Investment A
Cash flow in year 0 = -$150
Cash flow in year 1 = $80
Cash flow in year 2 = $40
Cash flow in year 3 = $40
Cash flow in year 4 = $30
I = 10%
NPV = 6.33
Investment A
Cash flow in year 0 = -$150
Cash flow in year 1 = $40
Cash flow in year 2 = $50
Cash flow in year 3 = $60
Cash flow in year 4 = $55
I = 10%
NPV = 10.33
Project B has a higher NPV and it should be chosen
To find the NPV using a financial calculator:
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
If customers share a concern, complaint, or question with you in person, you should remember to use verbal, nonverbal, and listening skills in conjunction with customer service.a. Trueb. False
Answer:
True.
Explanation:
True, the given statement is true because, for any business, customers are the main person for which the company makes the product. If the customer makes some complaint that means he is not happy with the service or product of your company. However, in such a case the company may lose its customers but it is the communication that can hold the customer when he complains. When a customer makes a complaint then it is a must remember all types of skills that can satisfy the customer and it could be verbal communication, nonverbal, and listening skills.
When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:__________.
a. The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method.
b. A reconciliation of net income to net cash provided or used by operating activities.
c. Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities.
d. The income statement to be prepared under the cash basis of accounting.
e. Noncash investing and financing activities be included in the statement of cash flows.
Answer:
b. A reconciliation of net income to net cash provided or used by operating activities.
Explanation:
FASB is an acronym for Financial Accounting Standards Board. The financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining standard financial accounting and reporting for general guidance of individuals such as investors, issuers and auditors. It was founded in 1972 but began operations fully on the 1st of July, 1973 by replacing the Accounting Principles Board (APB) and American Institute of Certified Public Accountants (AICPA).
When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires a reconciliation of net income to net cash provided or used by operating activities and it should be stated as part of the statement of cash flows or in the footnotes.
A direct method involves the use of the overall accrual-based income statement and converting them sequentially to the cash-basis.
Some examples of operating activities are cash revenue from the sales of a product, cash paid as an expense for merchandise etc.
Boswell Company manufactures two products, Regular and Supreme. Boswell’s overhead costs consist of machining, $5000000; and assembling, $2500000. Information on the two products is: Regular Supreme Direct labor hours 10000 15000 Machine hours 10000 30000 Number of parts 90000 160000 Overhead applied to Supreme using activity-based costing is
Answer:
$5,350,000
Explanation:
The computation of the overhead applied to supreme using activity based costing is shown below:
= Machine hours × machine hour rate + number of parts × cost per part
= 30,000 × ($5,000,000 ÷ (10,000 + 30,000)) + 160,000 × ($2,500,000 ÷ (90,000 + 160,000))
= 30,000 × $125 + 160,000 × $10
= $3,750,000 + $1,600,000
= $5,350,000
Hence, the overhead applied to supreme is $5,350,000
You’ve been given a customer complaint where a vital piece of Office 365 is not working as expected. The customer explains that the issue is causing their business a great deal of stress and is currently jeopardizing a huge sale. They’re looking to get this issue resolved immediately, how would you manage this scenario? Please provide a written response as if you were emailing the customer today.
Answer:
Dear Customer,
Re: Your complaint with Ref. No. 2233546 - Dysfunctional Office 365
The above caption refers.
We empathise with you over the stress being caused by the Dysfunctional Office 365.
Please be notified that one of our IT experts will be in touch with you shortly to attempt to remotely resolve this issue. We ask that you cooperate by providing all the necessary assistance.
You may be required to provide log on details to your Office 365 Accounts as well as the nature of your IT infrastructure such as :
Make and type of your work station;type of operating system being usednature of internet connectivity and associated infrastructure etc.We are aware that the above information is private and sensitive to your organisation and have proactively taken steps to ensure that all communication, information, are transmitted over highly secure servers with very powerful encryption technologies.
We thank you for your cooperation.
Kind regards,
"On November 10th, a customer buys 200 shares of ABC stock at $50 per share. On November 29th of the same year, the customer sells the stock at $44. On December 15th of the same year, the customer buys ABC stock at $49. The customer's cost basis in ABC stock is:"
Answer:
$55 per share
Explanation:
Calculation for the customer's cost basis in ABC stock
Based on the information given we were told that the customer bought the stock at the amount of $50 in which he later sold at the amount of $44 making the customers to have a loss of $6 per share ($50-$44), which means the customer adjusted of the cost basis on the stock will be calculated as :
ABC stock $49 + Loss of $6 per share
=$55 per share.
Therefore The customer's cost basis in ABC stock is: $55 per share.
Ragas, Inc. sold goods with a selling price of $50,000 in the 2017 and estimated 5% warranty expense for the year. Customers complained of defects, and goods with a cost of $1,500 had to be replaced. Which of the following is the correct journal entry for honoring the warranties with goods?
A. Estimated Warranty Payable 1,500
Cash 1,500
B. Estimated Warranty Payable 1,500
Warranty Expense 1,500
C. Warranty Expense 1,500
Merchandise Inventory 1,500
D. Estimated Warranty Payable 1,500
Merchandise Inventory 1,500
Answer:
D. Estimated Warranty Payable 1,500
Merchandise Inventory 1,500
When the Warranty is honored, the Estimated Warranty account is debited to show the claiming of the expense.
The relevant asset account which in this case is Merchandise inventory is credited to show that it's reduction.
When you want to save time recording progress and don't mind slightly less accuracy, which progress reporting approach would you choose?
The complete question reads;
When you want to save time recording progress and don't mind slightly less accuracy, which progress reporting approach would you choose?
a. tracking work and remaining work at the task level
b. tracking % complete at the task level
c. tracking work at the assignment level
d. tracking % complete at the assignment level
Answer:
d. tracking % complete at the assignment level
Explanation:
Remember, tracking the percent of completion of the assignment level would be indicating an overview of the entire assignment which may be slightly less accurate compared to the other listed options.
Thus, to save time recording progress this is the best viable option.
A market where prices reflect all available public information is _____.
a. strong form efficient
b. semistrong efficient
c. not efficient
d. weak form efficient
Answer:
The correct answer is:
b.) semistrong form efficient
Explanation:
In financial economics, the efficient-market hypothesis is a hypothesis that states that asset prices reflect all available information. The concept theorizes that the market is generally efficient, because it holds that a market cannot be beaten, because it incorporates all the important determination information into current share prices.
There are three versions of an efficient market hypothesis:
1. strong form efficient: This version states that all information - both information available to the public, and those not publicly known - is completely accounted for in stock prices, and there is no information type that can give an investor an advantage in the stock market.
2. semi-strong efficient: This version believes that only information readily available to the public can be used to factor prices and that changes in prices to new equilibrium levels are a product of this public information.
3. weak form efficient: This version assumes that current stock prices reflect all security market information. It contends that past price and volume data have no relationship to the direction or level of security prices. It concludes that excess returns cannot be achieved using technical analysis.
Suppose that Airstream and Crossroads are the sole producers of a fuel-efficent recreational vehicle. The two firms currently charge the same price for their products. If neither firm reduces the price of its fuel-efficent recreational vehicle, each firm earns $30 million in profit. If both firms reduce their prices, then each firm will earn $10 million in profit. If one firm reduces its price and the other does not, then the firm that reduces price will earn a profit of $60 million while the other firm will earn a profit of $2 million. Assuming that collusion is not a possibility, the Nash equilibrium occurs when:_________.
A. both firms will reduce their price.
B. Crossroads will reduce its price and Airstream will maintain its current price.
C. Airstream will reduce its price and Crossroads will maintain its current price
D. both firms will maintain their current price.
Answer:
A. both firms will reduce their price.
Explanation:
Airstream
not change price lower price
$30 / $60 /
not change price $30 $2
Crossroads
lower price $2 / $10 /
$60 $10
Airstream's highest payoff results from lowering its prices = $60 + $10 = $70
Crossroads highest payoff results from lowering its prices = $60 + $10 = $70
Nash equilibrium exists when both Airstream and Crossroads lower their prices.
On January 1, 2011, Fox Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to mature on January 1, 2021, but were callable at 101 any time after December 31, 2013. Interest was payable semiannually on July 1 and January 1. On July 1, 2016, Fox called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, Fox's gain or loss in 2016 on this early extinguishment of debt was
Answer:
$8,000 gain
Explanation:
the carrying value of the bonds at the time of the redemption:
10 coupon payments were made, so amortization of bond premium = ($40,000 / 20) x 11 = $22,000
carrying value = $1,040,000 - $22,000 = $1,018,000
redemption price = $1,000,000 x 1.01 = $1,010,000
Fox's gain = carrying value - redemption price = $1,018,000 - $1,010,000 = $8,000
Since the carrying value was higher than the redemption value, Fox must report a gain.
Why might a purely competitive industry advertise, even if individual firms do not? Choose one
A. An industry cannot advertise because it is not an actual business.
B. An industry would never advertise in a purely competitive market.
C. An industry can advertise to promote its products without shifting the average total cost curve for individual firms.
D. The industry can selectively promote firms and force some out of business.
E. The industry hopes to boost overall demand for the substitute goods.
Answer:
B. An industry would never advertise in a purely competitive market.
Explanation:
A purely competitive market is one where the products being sold are nearly the same, that is they are standardised.
It is also called perfect competition.
Sellers are unable to differentiate their products from others. So there is no point advertising in this type of market because this only increases marginal cost of the firms.
Advertising effort for standardised products will have little effect on consumer choice.
In this type of market the price is determined by what the buyer is willing to pay.
The purely competitive industry advertise, even if individual firms do not is because of
B. An industry would never advertise in a purely competitive market.
The following information regarding the purely competitive market is:
It is the market where the products are sold are of similar nature. It increase the marginal cost. It is also known as the perfect competition. Since the products are homogeneous so advertising is not needed.Learn more: brainly.com/question/17429689
Which of the following did management at Zappos do to reduce the level of formalization in their organization?
A. They avoided asking their customer service reps in call centers to follow a detailed script.
B. They increased their reliance on drop-shipment orders.
C. They established top-down management as their primary strategy.
D. They put an end to the practice that enabled employees to horizontally rotate to different jobs once they had mastered a particular job.
Answer:
A. They avoided asking their customer service reps in call centres to follow a detailed script.
Explanation:
Formalisation refers to the manner in which the company follows extra depth of procedures and takes extra unnecessary care of the customers, or even in the internal procedures of organisation also.
For the customers perspective, we have:
As asking their customers for service reps again and again will make the entire process formalised, and leaving it on the discretion of customers that when they want to avail the service makes it less formal and comfortable for customers.
Thus, avoiding the detailed script with some unnecessary details every time and following up again and again the function becomes less formal and comfortable.
Final Answer:
Option A
If a cost is a common cost of the segments on a segmented income statement, the cost should:_________.
a. not be allocated to the segments.
b. be excluded from the income statement.
c. be treated as a product cost rather than as a period cost.
d. be allocated to the segments on the basis of segment sales.
Answer:
the correct answer is
If a cost is a common cost of the segments on a segmented income statement, the costshould:A) be allocated to the segments on the basis of segment sales.
Explanation:
hope this helps u!!!
What layout type is a conventional supermarket and how does it differ from a manufacturing operation using the same layout type
Answer:
Grid layout
Explanation:
In most of the supermarket store, when there is a billing section located in that the opposite end of the entry and the exit gate i.e. nearest is located. Also the products are arranged in a rack throughout the whole supermarket.
So this presentation refers to the grid layout which is easy for the customers to pick up their order and bill it at the billing section in an organized manner
In the grid layout all the products are presented on the rack while on the other hand, in the cellular layout, the products are transferred from one station to another station
The WRT Corporation makes collections on sales according to the following schedule: 30% in month of sale 60% in month following sale 5% in second month following sale 5% uncollectible The following sales have been budgeted: Sales April $ 158,000 May $ 128,000 June $ 141,000 Budgeted cash collections in June would be:
Answer:
Budgeted cash collections in June would be: $127,000
Explanation:
Calculation of the Budgeted Collections for June
In the Month of Sale ($ 141,000 × 30 %) = $42,300
In Month following Sale ($ 128,000 ×60%) = $76,800
In Second Month following sale ($ 158,000 × 5%) = $7,900
Total Budgeted Collections for June = $127,000
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $5.3 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $5.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $12.8 million to build, and the site requires $800,000 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:
$18.9 million
Explanation:
The computation of the proper cash flow amount to use as the initial investment in fixed assets is shown below:
= Land + building + grading
= $5.3 million + $12.8 million + $800,000
= $18.9 million
We simply added the land, building and grading cost so that the proper cash flow i.e to be used for the initial investment could come
Long Beach, Inc., a lessor, charges Applewood Corp., a lessee, a $10,500 nonrefundable fee to enter into a five-year operating lease. The lease is effective on January 1, 2016. It provides for monthly rental of $2,400. In Applewood's income statement for the year ended June 30, 2016, rent expense should be
Answer:
Rent expense= $30,900
Explanation:
Non-refundable fee expense for year 2016 = $10,500 / 5
Non-refundable fee expense for year 2016 = $2,100
Annual rent expenses = Monthly rental * 12 month
Annual rent expenses = $2,400 * 12
Annual rent expenses = $28,800
Rent expense for year ended June 30, 2016 = Annual rent expense + Non-refundable fee expense for the year
Rent expense = $28,800 + $2,100
Rent expense = $30,900
Courier Logistics Corp. will issue $2,400,000 in 8-year bonds that pay 5% annually. The market rate for bonds of similar riskiness and maturity is 4%. How much cash will Courier Logistics Corp. receive from this bond issuance?
a. $2,529,241.
b. $2,374,124.
c. $2,561,585.
d. $2,400,000.
Answer:
Courier Logistics Corp will receive c. $2,561,585 from this bond issuance
Explanation:
Note that the Yield to Maturity is less than the Coupon Rate, therefore the bond is trading at a Premium (price will be greater than the par value)
The price of the bond, PV is calculated as follows :
PMT = $2,400,000 × 5% = $120,000
P/YR = 1
N = 8
FV = $2,400,000
YTM = 4%
PV= ?
Using a Financial Calculator, the price of the bond, PV is $2,561,585.87 or $2,561,585.
A grocery store manager must decide how to best present a limited supply of milk and cookies to its customers. Milk can be sold by itself for a profit of $1.50 per gallon. Cookies can likewise be sold at a profit of $2.50 per dozen. To increase appeal to customers, one gallon of milk and a dozen cookies can be packaged together and are then sold for a profit of $3.00 per bundle. The manager has 100 gallons of milk and 150 dozen cookies available each day. The manager has decided to stock at least 75 gallons of milk per day and demand for cookies is always 140 dozen per day. To maximize profits, how much of each product should the manager stock. Which of the following is the constraint that limits the amount of milk the store will use (both in bundles and sold separately) each day
Answer:
m + b ≤ 100 (100 gallons of milk available per day)
Explanation:
there are no options available, so I will prepare my own equations:
the profit function = 1.5m + 2.5c + 3b
where m = gallon of milk, c = dozen of cookies, b = bundle
we need to maximize profits, therefore the constraints will be:
m + b ≤ 100 (100 gallons of milk available per day) c + b ≤ 150 (150 dozen cookies available per day) m + b ≥ 75 (at least 75 gallons of milk are stocked per day) c + b = 140 (daily demand for dozens of cookies) m + c + b ≥ 0 (demand is positive)Sholette Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) at $10.00 per MH. During the month, the actual total variable manufacturing overhead was $66,430 and the actual level of activity for the period was 7,300 MHs. What was the variable overhead rate variance for the month
Answer:
Variable overhead rate variance is $6,570 Favorable.
Explanation:
Variable overhead rate variance = variable overhead expenditure variance + variable overhead efficiency variance.
Note : Only data for calculation of variable overhead expenditure variance is available
Variable overhead expenditure variance =Actual activity at standard rate - Actual overheads
= ( 7,300 × $10.00) - $66,430
= $6,570 Favorable
Thus,
Variable overhead rate variance is $6,570 Favorable
Leonora Whatley is the head of the marketing research department for a cosmetics manufacturer. Whatley delegates as much authority as possible to her fourteen subordinates although she still retains ultimate responsibility. Whatley manages a _____ department.
Answer:
Decentralized
Explanation:
From the above description of Leonora Whatley, it is evident that Whatley manages a decentralized department.
Having delegated authority to her fourteen subordinates and retaining her ultimate responsibility, this means that she has decentralized the department making the department into smaller units.
Decentralization can be defined as the process by which the central activities of an organization are distributed or delegated to low-level group members or subordinates for execution. Decentralization fosters growth and development.
Report the effects for each of the following independent transactions using the financial statement effects template provided Balance Sheet Noncash Assets Earned Transaction Cash Asset + Liabilities+ Contributed Revenu Capital Capital
(a) Issue stock for $1,500 cash
(b) Purchase inventory for $750 cash
(c) Sell inventory from (b) for $3,000 on credit
(d) Record $750 for cost of inventory sold in (c)
(e) Receive $3,000 cash on receivable from (c) Totals
Answer:
since there is not enough room here, I prepared an excel spreadsheet
Explanation:
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: Possible Market Reaction Sales in Units Probabilities Low response 20 .30 Moderate response 35 .20 High response 50 .20 Very high response 90 .30
a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.)
b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.)
Possible Market Reaction Sales Units Probability Expected sales
Low response 20 .30 6
Moderate response 35 .20 7
High response 50 .20 10
Very high response 90 .30 27
Total 50 units
b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
mean = (6 + 7 + 10 + 27) / 4 = 12.5
variance = {[0.30 x (20 - 50)²] + [0.20 x (35 - 50)²] + [0.20 x (50 - 50)²] + [0.30 x (90 - 50)²]} / 4 = (270 + 45 + 0 + 480) / 4 = 795 / 4 = 198.75
standard deviation = √198.75 = 14.10 units
Kotrick Company has beginning inventory of units and expected sales of units. If the desired ending inventory is units, how many units should be produced?
Answer: $26,000
Explanation:
Ending Inventory = Beginning Inventory + Units to be produced - Sales
18,000 = 15,000 + Units to be produced - 23,000
Units to be produced = 18,000 + 23,000 - 15,000
Units to be produced = $26,000