Answer:
B. for many firms, marginal and average variable costs are constant over wide ranges of output.
Explanation:
Traditional Cost Theory : Marginal & Average Variable Cost are U shaped.
Modern theory of cost behaviour for real world firms suggest - 'short run average variable cost (SAVC)' is saucer shape curve, ie flat (constant) stretch over a wide range of output.
Such shape of SAVC is due to 'reserve capacity' of production by firms, to meet up unexpected demand change due to seasonal or consumer taste changes. This reserve capacity prevents the SAVC to rise immediately after falling (as per U shape) & rather sustains it constant for a wide range of output (as a saucer shape)
Yurman Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had a balance of $960,000 at December 31, 2016 before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of $240,000 at December 31, 2016. Outstanding service contracts at December 31, 2016 expire as follows: During 2017 During 2018 During 2019 $200,000 $320,000 $140,000 What amount should be reported as unearned service contract revenues in Yurman's December 31, 2016 balance sheet
Answer:
$660,000
Explanation:
Relevant data provided
During 2017 = $200,000
During 2018 = $320,000
During 2019 = $140,000
As per the given question the solution of Amount to be reported as unearned service contract revenues is provided below:-
Amount to be reported = During 2017 + During 2018 + During 2019
= $200,000 + $320,000 + $140,000
= $660,000
To reach amount to be reported as unearned service contract revenues we simply put the values into formula.
Hair Zone manufactures a brand of hair styling gel. It is considering adding a modified version of the product-a foam that provides stronger hold. Hair Zone's variable costs and prices to wholesalers are: Current hair gel New foam product Unit selling price 2.00 2.25 Unit variable costs 85 1.25 Hair Zone expects to sell 1 million units of the new styling foam in the first year after introduction, but it expects that 60% of those sales will come from buyers who normally purchase Hair Zone's styling gel. Hair Zone estimates that it would sell 1.5 million units of the gel if it did not introduce the foam. If the fixed cost of launching the new foam will be $100,000 d the first year, should Hair Zone add the new product to its line? Why or why not?
Answer:
Should Hair Zone add the new product to its line? Why or why not?
Yes they should, since it would increase their total net income by $210,000.Explanation:
Current hair gel New foam product
Unit selling price $2.00 $2.25
Unit variable costs $0.85 $1.25
expected sales for new foam product 1,000,000 units, but 600,000 units would replace sales from current hair gel
expected sales for current hair gel if new foam is introduced 900,000 units (1,500,000 if no new product is introduced)
Alternative 1 Alternative 2 Differential
no new foam new foam income
total sales revenue $3,000,000 $4,050,000 $1,050,000
total variable costs ($1,275,000) ($2,015,000) ($740,000)
additional fixed costs $0 ($100,000) ($100,000)
total $1,725,000 $1,935,000 $210,000
Mackalya is an office secretary at the "All American Office Products Company." This Company sells office supplies and office equipment. The secretary fills the copy machine with paper. Did the secretary use inventory as described in Chapter 4? If Mackalya did not use inventory, what did she use? What is inventory? Suppose Mackalya was out of paper in the office; so she went out into the sales area of the facility and took 8 boxes of paper from the sales area and brought them back to use in the office. What journal entry should be made. When a Company sells inventory, the dollars leave the inventory account and go to what account? Make sure to answer all parts of this question.
Answer:
1. Yes; Journal entry
2. Debit- Printing & Stationery Expense $160 (value for 8 boxes)
Credit- Cost of goods sold or Trading account A/c $160
3. Leaves to the cost of goods sold account
Explanation to:
1. Mackalaya used inventory. Remember, inventory is a term used to refer to all the merchandise (goods or products) a company has at the moment in stock.
2. The Journal entry to be made would be
Debit- Printing & Stationery Expense $160 and Credit this value to Cost of goods sold or Trading account A/c section of the Journal entry.
3. Remember, the cost of goods sold cares for all inventory sales, therefore it would be credited with value of the inventory item sold by the company.
AZ Products has 375,000 shares of common stock outstanding at a market price of $35 a share. Next year's annual dividend is expected to be $1.50 a share and the dividend growth rate is 2 percent. The firm also has 7,500 bonds outstanding with a face value of $1,000 per bond. The bonds have a pretax yield of 7.65 percent and sell at 98.6 percent of face value. The company's tax rate is 34 percent. What is the firm's weighted average cost of capital?
Answer:
The firm's weighted average cost of capital 5.81%
Explanation:
In order toTo calculate WACC, we need to calculate the cost of equity and after-tax cost of debt. The WACC can be calculated with the use of following formula:
WACC = After-Tax Cost of Debt*Weight of Debt + Cost of Equity*Weight of Equity
Where,
After-Tax Cost of Debt = Pretax Yield*(1-Tax Rate)
Market Value of Debt = Outstanding Bonds*Par Value*Current Selling Percentage
Cost of Equity = D1/Current Market Price + Growth Rate
Market Value of Equity = Number of Common Shares Outstanding*Current Market Price
Weight of Debt = Market Value of Debt/(Market Value of Debt + Market Value of Equity)
Weight of Equity = Market Value of Equity/(Market Value of Debt + Market Value of Equity)
Therefore, Market Value of Debt = 7,500*1,000*98.60% = $7,395,000
Market Value of Equity = 375,000*35 = $13,125,000
Weight of Debt = 7,395,000/(13,125,000 + 7,395,000)
Weight of Equity =$13,125,000 /($13,125,000 + 7,395,000)
Cost of Equity = 1.50/35 + 2% = 6.28% 0.01801
After-Tax Cost of Debt = 7.65*(1-34%) = 5.05%
Using the values calculated above in the formula for WACC, we get,
WACC = 5.05%*7,395,000/(13,125,000 + 7,395,000) + 6.28% *$13,125,000/($13,125,000 + 7,395,000) = 5.81%
A football game between the Thunder and the Sharks is in its closing minutes, with the Thunder ahead by 20 points. The Thunder’s coach considers sending in the second-string quarterback. This would reduce the risk of the star quarterback getting injured, but the second-string quarterback is not very good. Complete the passage describing the coach’s decision in economic terms.
1. Fill in the blanks with appropriate option.
The coach is weighing a slightly ___________ risk of losing against a slightly decreased risk of injury to the star quarterback. This weighing of ________ is an example of ___________, because the star quarterback was in for most of the game, and the coach's decision concerns ____________ shifts in probabilities with the game nearly over
Options:
A) decreased *
B) large
C) marginal thinking.
D) small
E) increased
F) incentives
G) trade-offs
Answer: increased, trade- offs, marginal thinking, small.
Explanation:
According to the passage, The coach is weighing a slightly increased risk of losing against a slightly decreased risk of injury to the star quarterback. This weighing of trade-offs is an example of marginal thinking, because the star quarterback was in for most of the game, and the coach's decision concerns small shifts in probabilities with the game nearly over.
The coach is weighing a slightly increased risk of losing against a slightly decreased risk of injury to the star quarterback. This weighing of trade- offs is an example of marginal thinking because the star quarterback was in for most of the game, and the coach's decision concerns small shifts in probabilities with the game nearly over.
The increase in risk implies the chances of return of positive gain is less but the gain would be higher than less risky opportunities.
Trade-offs situations represent the increase of one variable but with fall in other variable values. Thus, the coach is making a trade-off between the risk of losing and the risk of injury.
Marginal thinking implies a comparison of benefits and costs when one more unit is added for optimal decision.
The shift in probabilities refers to small variations made in chances of winning by stimulation the strategy to get better outcomes.
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FixIt, Inc. operates 20 injection molding machines in the production of tool boxes of four different sizes, named the Apprentice, the Handyman, the Journeyman, and the Professional. Classify each of the following costs as unit-level, batch-level, product-level, or facility-level. Activity Cost Level (a) First-shift supervisor’s salary. select an option (b) Powdered raw plastic. select an option (c) Dies for casting plastic components. select an option (d) Depreciation on injection molding machines (assume units-of-activity depreciation). select an option (e) Changing dies on machines. select an option (f) Moving components to assembly department. select an option (g) Engineering design. select an option (h) Employee health and medical insurance coverage.
Answer:
(a) Facility-level: First-shift supervisor’s salary.
(b) Unit-level: Powdered raw plastic.
(c) Product-level: Dies for casting plastic components.
(d) Unit-level: Depreciation on injection molding machines (assume units-of-activity depreciation).
(e) Batch-level: Changing dies on machines.
(f) Batch-level: Moving components to assembly department.
(g) Product-level: Engineering design.
(h) Facility-level: Employee health and medical insurance coverage.
Explanation:
In an Activity Based Costing (ABC), costs are grouped into four (4) categories according to the cost driver utilized. These are namely;
1. Facility-level costs: any cost of activity, that isn't tied to individual products and services but are utilized for the running of the company in general.
2. Batch-level cost: all costs of activity associated with a group of products and services.
3. Product-level cost: all costs of activity associated with individual products and services, irrespective of the batches or units produced.
4. Unit-level cost: is the total expenditure associated with producing an individual unit of product and service.
a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $80,000 in cash along with equipment having a $40,000 value
b. On May 21, Elegant Lawns purchases office supplies on credit for $480.
c. On May 25, Elegant Lawns receives $8,800 cash for performing landscaping services
d. On May 30. Elegant Lawns receives $2,000 cash in advance of providing landscaping services to a customer
For each transaction, (1 analyze the transaction using the accounting equation, (2) record the transaction in journal entry form, and (3) post the entry using T-accounts to represent ledger accounts. Use the following (partial) chart of accounts-account numbers parentheses: Cash (101); Accounts Receivable (106): Office Supplies (124): Trucks (153): Equipment (167), Accounts Payable (201 Unearned Landscaping Revenue (236) D. Tyler. Capital (301), D. Tyler, Withdrawals (302; Landscaping Revenue (403), Wages Expense (601), and Landscaping Expense (696)
Answer:
Elegant Lawns Company
1) Analysis of Transactions using the Accounting Equation:
Assets = Liabilities + Equity:
a) Assets (Cash $80,000) and (Equipment $40,000) increased = Liabilities + Equity ($120,000) increased.
b) Assets (Supplies $480) increased = Liabilities (Accounts Payable $480) increased + Equity
c) Assets (Cash $8,800) increased = Liabilities + Equity (Retained Earnings $8,800) increased
d) Assets (CVash $2,000) increased = Liabilities (Deferred Revenue $2,000) increased + Equity
2) Journal Entries:
Debit Credit
a) Cash $80,000
Equipment $40,000
Equity $120,000
To record equity in cash and equipment
b) Office Supplies $480
Accounts Payable $480
To record purchase of office supplies on credit
c) Cash $8,800
Revenue $8,800
To record cash receipts from customers
d) Cash $2,000
Deferred Revenue $2,000
To record cash receipt in advance for services to a customer
3) T-Accounts Ledger:
Cash Account
Debit ($) Credit ($)
a) Equity 80,000 Balance c/d 90,800
c) Revenue 8,800
d) Deferred Revenue 2,000 00000
90,800 90,800
Balance b/d 90,800
Equipment Account
Debit ($) Credit ($)
a) Equity 40,000
Equity Account
Debit ($) Credit ($)
Balance c/d 120,000 a) Cash 80,000
000000 a) Equipment 40,000
120,000 120,000
Balance b/d 120,000
Office Supplies Account
Debit ($) Credit ($)
b) Accounts Payable 480
Accounts Payable Account
Debit ($) Credit ($)
b) Office Supplies 480
Revenue Account
Debit ($) Credit ($)
c) Cash 8,800
Deferred Revenue Account
Debit ($) Credit ($)
d) Cash 2,000
Explanation:
a) The accounting equation states that Assets are equal to Liabilities plus Equity for every given business transaction. Each transaction affects either the two sides of the equation equally or increases and decreases one side only. This equation means that the two sides must be in balance given any transaction. For example, the purchase of goods on credit will increase Inventory and increase Liabilities by the same amount.
b) Journal Entries are used to initially record or recognize business transactions. The entries show which accounts will be debited and which will be credited in the Ledger.
c) T-Accounts is accounting tool which shows the ledger account to be debited and credited and to balance the account at the end of a period. It is from the ledger that a trial balance is extracted before adjustments are made for the preparation of financial statements.
Carrejo Corporation has two divisions: Division M and Division N. Data from the most recent month appear below:
Total Company Division M Division N
Sales $404,000 $181,000 $223,000
Variable expenses 152,130 65,160 86,970
Contribution margin 251,870 115,840 136,030
Traceable fixed expenses 192,000 87,000 105,000
Segment margin 59,870 28,840 31,030
Common fixed expenses 52,520 23,530 28,990
Net operating income $7,350 $5,310 $2,040
Management has allocated common fixed expenses to the Divisions based on their sales. The break-even in sales dollars for Division N is closest to:
a. $172,131
b. $219,656
c. $258,230
d. $392,211
Answer:
Break-even point (dollars)= $219,656
Explanation:
Giving the following information:
Division N
Sales= $223,000
Variable expenses= 86,970
Contribution margin= 136,030
Traceable fixed expenses= 105,000
Segment margin= 31,030
Common fixed expenses= 28,990
To calculate the break-even point in dollars for Division N, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
contribution margin ratio= (sales - variable costs) / sales
Break-even point (dollars)= (105,000 + 28,990) / (136,030/223,000)
Break-even point (dollars)= $219,656
When Allison Logue found out her children were allergic to corn, she started looking for sweets and starches that were corn-free and was dismayed to find very few such products on the market. As a result, she has started her own small business to produce and market corn-free desserts. It is a small market, and Logue plans to keep her business small. Logue is an example of a(n) ______________.a. interpreneurb. multipreneurc. intrapreneurd. growth entrepreneure. micropreneur
Answer:
growth entrepreneure
Explanation:
i know the answer
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $117,640. The seller agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,000. Southwest Milling had to hire a specialist to calibrate the loader. The specialist’s fee was $760. The loader operator is paid an annual salary of $6,140. The cost of the company’s theft insurance policy increased by $2,220 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,300.
Required:
1. Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.)
Answer:
Total amount to be capitalized in the asset account for the purchase of the front-end loader is $115,400
Explanation:
Insurance cost and operator salary are operational expenses and would not be capitalized.
Costs that are to be capitalized
List price = $117,640
Discount = $117,640 × 4.25% = ($ 5,000)
Freight costs = $2,000
Specialist fees = $760
Total amount to be capitalized in the asset account for the purchase of the front-end loader = $117,640 + $2,000 + $760 - $5,000
= $115,400
Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:
Month Machine Hours Electricity Costs
January 2,900 $ 18,600
February 3,300 $ 21,400
March 2,300 $ 13,700
April 3,500 $ 23,400
May 4,200 $ 28,450
June 3,700 $ 22,400
July 4,500 $ 24,950
August 3,900 $ 22,950
September 2,400 $ 15,900
October 4,100 $ 26,400
November 5,300 $ 31,400
December 4,900 $ 27,950
Summary Output
Regression Statistics
Multiple R .959
R Square .920
Adjusted R2 .912
Standard Error 1,550.32
Observations 12.00
Coefficients Standard Error t Stat P-value Lower 95% Upper 95%
Intercept 2,992.80 1,933.78 1.55 0.15 (1,315.92) 7,301.52
Machine Hour 5.37 0.50 10.70 0.00 4.25 6.49
If the controller uses the high-low method to estimate costs, the cost equation for electricity cost is: (Round intermediate calculations to 2 decimal places.)
A. Cost = $2,992.80 + $5.37 × Machine-hours.
B. Cost = $130.00 + $5.90 × Machine-hours.
C. Cost = $6.50 × Machine-hours.
D. Cost = $23,670.
Answer:
The correct option : B. Cost = $ 130.00 + $ 5.90 x Machine - hours
Explanation:
Let's use the following method to solve the given problem
Now applying the high-low method of cost estimation,
High => November, 5,300 machine hours
Low => March, 2,300 machine hours
Arranging it in a simultaneous equations for total cost:
We can let fixed cost per month to be F, and the variable cost per machine -hour be V, and the number of machine-hours be Q.
Therefore
Total cost = F + VQ
High => F + 5,300Q = $ 31,400
Low => F + 2,300Q = $ 13,700
Subtracting Low from High, we have 3,000Q = $ 17,700 or Q = $ 5.90 per machine hour ................equation one
F = $ 13,700 - ( 2,300 x $ 5.90) = $ 130......................................................................equation two
You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $22,500 to purchase and which will have OCF of −$2,900 annually throughout the vehicle’s expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $31,000 to purchase and which will have OCF of −$1,500 annually throughout that vehicle’s expected 4-year life. Both cars will be worthless at the end of their life. You intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future. If the business has a cost of capital of 13 percent, calculate the EAC.
Answer:
EAC of Scion xA= 12,429.24
EAC of Toyota = $11,922.02
The Toyota should selected because it has a lower EAC
Explanation:
Equivalent Annual cost = PV of cost/Annuity factor
Scion xA
PV of OCF= A × (1- (1+r)^(-n)/n
= 2,900 × (1 -(1.13)^(-3))/0.13=6847.342534
PV of total cost = 22,500 + 6847.34 = 29,347.34253
EAC = 29,347.34/ 2.361152598= 12429.24433
EAC = 12429.24
EAC Toyota
PV of OCF = 1500×(1 -(1.13)^(-4))/0.13= 4461.706988
PV of total cost = 31,000 + 4461.7069= 35,461.70699
EAC = 35,461.706/ 2.9744 = 11,922.02
EAC = $11,922.02
EAC of Scion xA= 12429.24
EAC of Toyota = $11,922.02
Command-and-control legislation, as compared to incentive-based regulation: Group of answer choices discourages the use of comparative advantage in the short run, but encourages the development of new technology in the long run. encourages the use of comparative advantage in the short run, and the development of new technology in the long run. discourages the use of comparative advantage in the short run, and discourages the development of new technology in the long run. encourages the use of comparative advantage in the short run, but discourages the development of new technology in the long run.
Answer:
discourages the use of comparative advantage in the short run, and discourages the development of new technology in the long run.
Explanation:
Control and command regulations are those that states the goals to be achieved and dictates steps to be taken to achieve these goals.
On the other hand incentive based regulations are those that focus on how to motivate employees to achieve organisational goals.
Because of lack of focus on employee buy in the control and command regulations are less effective in the short run and also in the long run. So it discourages the use of comparative advantage in the short run, and discourages the development of new technology in the long run
M2 includes M1 plus: A) checking account deposits, large-denomination time deposits, and noninstitutional money market fund shares. B) currency in circulation, checking account deposits in banks, and holdings of traveler's checks. C) currency in circulation, savings account balances, and small-denomination time deposits. D) savings account balances, money market deposit accounts in banks, small-denomination time deposits, and noninstitutional money market fund shares.
Answer:
D) savings account balances, money market deposit accounts in banks, small-denomination time deposits, and noninstitutional money market fund shares.
Explanation:
M1 includes money in circulation, travellers check, money in checking accounts and money deposited in the banks.
M2 includes m1 + savings accounts, small time deposits, and money markets.
M1 is thenarrow definition of money. M2 is the broader definition of money .
I hope my answer helps you
The correct option is D.
D) savings account balances, money market deposit accounts in banks, small-denomination time deposits, and noninstitutional money market fund shares.
The following information should be considered:
M1 includes money in circulation, travellers check, money in checking accounts and money deposited in the banks. M2 includes m1 + savings accounts, small time deposits, and money markets.
Therefore we can say that M1 is the narrow definition of money while on the other hand M2 is the broader definition of money.
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A parking lot charges $2 per hour for the first 4 hours, then $3 per hour after that. Which equation(s) describes the total cost y as a function of the hours x?
Answer:
there are no options but i would say it’s probably close to y= 8 + 3x
The following transactions apply to Ozark Sales for Year
1: The business was started when the company received $49,000 from the issue of common stock.
2. Purchased equipment inventory of $176,500 on account. Sold equipment for $203,000 cash (not including sales tax).
3. Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $128,000.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales.
5. Paid the sales tax to the state agency on $153,000 of the sales.
6. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2.
7. Paid $5,500 for warranty repairs during the year.
8. Paid operating expenses of $53,500 for the year.
9. Paid $124,200 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
Required:
a. Prepare the journal entries for the above transactions and post them to the appropriate T-accounts.
b. Prepare the income statement, balance sheet, and statement of cash flows for 2016.
c. What is the total amount of current liabilities at December 31, 2016?
Answer:
Explanation:
Income Statement
Sales $ 203,000
Less: Cost of Goods Sold $-128,000
Gross Profit $ 75,000
Operating Expense $ 54,500
Warranty Expense ($203,000*4%) $ 8,120
Total Operating Expense $ -62,620
Operating Income $ 12,380
Add: Other income/gains
Interest Revenue $ 478
Net Income $ 12,858
Part b-2 Balance Sheet
Assets:
Cash $ 91,100
Inventory $ 47,000
Interest Receivable ($20,500*7%*4/12) $ 478
Total Assets $ 138,578
Liabilities:
Accounts Payable $ 49,100
Estimated Warranty $ 2,120
Sales Tax Payable $ 4,000
Note Payable $ 20,500
Total liabilities $ 75,720
Stockholder's Equity
Common Stock $ 50,000
Retained Earning $ 12,858
Total Stockholder's Equity $ 62,858
Total Liabilities and equity $ 138,578
Part b-2 Cash Flow
Cash flow from operating activities:
Cash from sales $ 219,240
Cash paid for repairs $ -6,000
Cash paid for operating expense $ -54,500
Cash paid for sales tax $ -12,240
Cash paid for purchases $-125,900
Total Cash flow from operating activities $ 20,600
Cash flow from Financing activities:
Issue of common stock $ 50,000
Borrowing from bank $ 20,500
Cash flow from financing activities $ 70,500
Net Increase/decrease $ 91,100
Hopkins Co. at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $3,000,000 Estimated litigation expense 4,000,000 Extra depreciation for taxes (6,000,000) Taxable income $ 1,000,000 The estimated litigation expense of $4,000,000 will be deductible in 2018 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2,000,000 in each of the next three years. The income tax rate is 30% for all years. The deferred tax asset to be recognized is
Answer:
The deferred tax asset to be recognized is $300,000
Explanation:
In order to calculate the deferred tax asset to be recognized we would have to make the following calculation with the following formula according to the given data:
Income tax payable = Taxable income*Tax rate
Therefore, Income tax payable=$1,000,000*30%
Income tax payable = $300,000
The deferred tax asset to be recognized is $300,000
With current technology, suppose a firm is producing 800 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 6 units of labor, 5 units of land, 4 units of capital, and 2 units of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively.
Required:
1. Assume the firm can sell these 800 loaves at $1 per unit, will it continue to produce banana bread?2. What is the firm's total revenue?3. What is the firm's total cost?4. What is the firm's profit or loss?
Answer:
1. No
2. $800
3. 820
4. Loss = $-20
Explanation:
Total revenue = price x quantity = 800 x $1 = $800
Total cost = ( 6 x $40) + (5 × $60) + (4 × $60) + (2 × $20) = $820
Profit / loss = Total revenue - Total cost
$800 - $820 = $-20
Because the firm is earning a loss, the firm would not continue to produce.
I hope my answer helps you.
what us investing for
Answer: Investing is a way of making money by putting money towards it.
Explanation: When you invest your money in a stock, you can make more money back within the future.
Morning Smiles Coffee Company manufactures Stoneware French Press coffee makers and sold 8,000 coffee makers during the month of March at a total cost of $612,500. Each coffee maker sold at a price of $100. Morning Smiles also incurred two types of selling costs: commissions equal to 5% of the sales price and other selling expense of $45,000. Administrative expense totaled $47,500.Required: Prepare an income statement for Morning Smiles for the month of March and calculate the percentage of sales revenue represented by each line of the income statement. (Note: Round answers to one decimal place.) Morning Smiles Coffee Company Income Statement For the Month of March Sales revenue Cost of goods sold Gross margin Less Selling expense: Variable commissions Fixed selling expense Administrative expense Operating income
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales= 8,000 units
Total cost= $612,500.
Selling price= $100.
Selling costs:
commissions equal to 5% of the sales
other selling expense of $45,000.
Administrative expense totaled $47,500
Income statement:
Sales revenue= (8,000*100)= 800,000 100%
COGS= (612,500) 76.56%
Gross profit= 187,500
commissions= 0.05*800,000= (40,000) 5%
other selling expense= (45,000) 5.63%
Administrative expense= (47,500) 5.94%
Net operating income= 55,000 6.87%
A company that produced 1,000 units and sold 800 units had the following costs:
Direct materials $150,000
Factory building and equipment depreciation $250,000
Sales salaries $130,000
Office building and equipment depreciation $170,000
Office salaries $200,000
Factory insurance, utilities, etc. $300,000
Factory wages $100,000
Office insurance, utilities, etc. $140,000
Total product cost is:
A. $800,000
B. $580,000
C. $640,000
D. $1,440,000
Answer:
Option A,$800,000 is the correct option
Explanation:
Total product cost includes the direct material costs.direct labor costs as well as the manufacturing overhead.
The product costs only include costs incurred directly or indirectly in order to produce the products.
product costs=direct materials+factory building and equipment depreciation+factory insurance,utilities e.t.c+factory wages=$150,000+$250,000+$300,000+100,000=$800,000
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 97,200 units per year is: Direct materials $ 2.20 Direct labor $ 4.00 Variable manufacturing overhead $ 0.60 Fixed manufacturing overhead $ 3.35 Variable selling and administrative expenses $ 1.60 Fixed selling and administrative expenses $ 3.00 The normal selling price is $21.00 per unit. The company’s capacity is 116,400 units per year. An order has been received from a mail-order house for 1,600 units at a special price of $18.00 per unit. This order would not affect regular sales or the company’s total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company’s inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units?
Answer:
$15,360
Explanation:
As per the data given in the question,
Particulars Per unit 1600 Units
Incremental sales $18.00 $28,800(1,600×$18)
Incremental cost :
Direct material $2.20 $3,520(1,600×$2.20)
Direct labor $4.00 $6,400(1,600×$4)
Variable manufacturing overhead $0.60 $960(1,600×$0.60)
Variable selling and administrative expense $1.60 $2,560(1,600×$1.60)
Total incremental costs $8.40 $13,440(1,600×$8.40)
Incremental profits $9.60($18.00-$8.40) $15,360(1,600×$9.60)
The annual profit will enhance by $15,360 if special order is accepted.
2)
The relevant cost is $1.60 which is the price of Variable selling and administrative expense. Since units have already prepared So all other costs are sunk cost.The fixed cost is not relevant because they won't change in total value.
Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period:
Merchandise Freight Paid by Seller Returns and Allowances
a. $32,000 --- FOB destination, n/30 $1,600
b. 12,800 $300 FOB shipping point, 2/10, n/30 2,500
c. 21,000 --- FOB shipping point, 1/10, n/30 4,000
d. 9,000 175 FOB shipping point, 2/10, n/30 1,000
e. 77,400 --- FOB destination, 1/10, n/30 ---
Answer:
a. $30,400
b. $10,394
c. $16,830
d. $8,015
e. $76,626
Explanation:
a. Amount to be paid in full settlement = Merchandise - Returns and Allowance
= ($32,000 - $1,600)
= $30,400
b. Amount to be paid in full settlement = (Merchandise - Returns and Allowance) - (Remaining balance × 2%) + Freight Paid by Seller
= ($12,800 - $2,500) - ($10,300 × 2%) + $300
= $10,300 - $206 + $300
= $10,394
c. Amount to be paid in full settlement = (Merchandise - Returns and Allowance) - (Remaining balance × 1%)
= ($21,000 - $4,000) - (17,000 × 1%)
= $17,000 - $170
= $16,830
d. Amount to be paid in full settlement = (Merchandise - Returns and Allowance) - (Remaining balance × 2%) + Freight Paid by Seller
= ($9,000 - $1,000) - ($8,000 × 2%) + $175
= $8,000 - $160 + $175
= $8,015
e. Amount to be paid in full settlement = Merchandise - (Merchandise × 1%)
= $77,400 - ($77,400 × 1%)
= $77,400 - $774
= $76,626
A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $67 per unit (100 bottles), including fixed costs of $22 per unit. A proposal is offered to purchase small bottles from an outside source for $35 per unit, plus $5 per unit for freight. Prepare a differential analysis dated March 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Answer:
The company should buy from an outside source rahter than manufacturing because each bottle manufactured costs $5 more.
Explanation:
Differential Analysis
Make Buy
Manufacturing Cost per bottle $ 67
Purchasing Cost per bottle $35
Freight per bottle $ 5
Fixed Costs $ 22
Total $ 67 $62
The company should buy the bottles from the outside source because the manufacturing costs are higher than the purchasing costs and the fixed costs.
The fixed costs are the irrelevant costs that will continue whether bottles are manufactured or purchased.
MVS, Inc. produces cleaning equipment, and operates several divisions. Division A produces a product that it sells to other companies for $25 per unit. It is currently operating at full capacity of 60,000 units per year. Variable manufacturing cost is $13 per unit, and variable marketing cost is $3 per unit.
The company wishes to create a new division, Division B, to produce an innovative new tool that requires the use of Division A's product (or one very similar). Division B will produce 20,000 units. Division B can purchase a product equivalent to Division A's from Company X for $18 per unit. However, MVS, Inc. is considering having Division A supply Division B with the product.
If Division A supplies Division B, the transfer price would be $16 and there would be no marketing costs associated with the units.
Required:
a) From Division A's perspective the net benefit (cost) is ___________.
Answer:
Net cost = $(120,000)
Explanation:
Division A is already operating at full capacity. This implies that it can sell all (60,000 units)l that it can produce. To preserve it current level of profit, any units sold to Division B would profitable provided it generates the same of amount of contribution currently earned.
Contribution earned from external sales = 25 - (13+3)= $9
Contribution earned from internal sales = 16- 13 = $3
Note that the variable market cost is not included in computing the contribution earned from internal sales because there wont be marketing cost.
Lost in contribution per unit from internal sales = $9- $3 = $6
Total loss = $6× 20,000 =($120,000).
Net cost = $120,000
The appellate court decides that the trial court committed reversible error by including evidence found by law enforcement. Law enforcement discovered this evidence when committing a Fourth Amendment violation, which should have been excluded at trial. This inadmissible evidence was the lynchpin of the prosecutor’s case, which resulted in a conviction.
1. Where does the case go from here?
2. Is the Defendant free to go?
3. Does it go back to the trial court?
4. Does it go all the way up to the Supreme Court?
Answer:
Now that the very evidence that lead to conviction of the defendant, that person will no longer serve the sentence given as a punishment as a result of the crime committed.Yes, the defendant would be free to go for now, unless they can produce any more evidence to charge him with the crime he allegedly committed. Conventionally it would go back to the trial court until and unless specified otherwise by the judge.It could go all the way up to the supreme court depending on whether the legal counsel handling the case puts in a request for it.Hope that answers the question, have a great day!
The analysis phase of decision making includes___________. Qualitative analysis is based primarily on__________ and decision-making effectiveness is usually increased by________. Quantitative analysis is based primarily____________ on and skills in this approach are usually increased by_______________ .
Answer: Please refer to Explanation
Explanation:
The attached photo contains the complete question as well as some options.
1. Both qualitative and quantitative analysis.
The analysis phase includes both of these types of analysis to provide a complete view of a variable from both a numbers and an experience perspective.
2. Judgement, experience, and intuition.
Qualitative Analysis is usually based on these 3 as numbers are not necessarily used.
3. Experience.
The more you are faced with analysing Qualitative data, the more the get used to it and better at it.
4. quantitative facts, data, and mathematical expressions.
Quantitative Analysis is done on mathematical instruments such as facts,data and expressions to provide a more mathematical driven approach to analysis.
5. Studying.
The more you study Quantitative Data and it's methods of analysis, the better you get at it because you begin to see patterns as well as use better analytic tools.
Answer:
i). Both qualitative and quantitative analysis.
ii). Judgement, experience and intuition.
iii). Experience.
iv). Quantitative facts, data and mathematical expressions.
v). Studying.
Explanation:
After this study above, it was easily gathered that quantitative analysis is often associated with numerical analysis where data is collected, classified, and then computed for certain findings using a set of statistical methods. Data is chosen randomly in large samples and then analyzed. The advantage of quantitative analysis the findings can be applied in a general population using research patterns developed in the sample while qualitative analysis is concerned with the analysis of data that cannot be quantified. This type of data is about the understanding and insights into the properties and attributes of objects (participants). Qualitative analysis can get a deeper understanding of “why” a certain phenomenon occurs.
If workers are more educated, then short-run aggregate supply ___________.
O will increase and output and price level will increase as well.
O decrease and output and price level will decrease as well.
O increase and output will increase but price level will decrease.
O increase and output will decrease but price level will increase.
O decrease and output will decrease but price level will increase.
Answer:
O will increase and output and price level will increase as well.
Explanation:
If workers are more educated, the productivity of the country will increase, increasing total output. As investment in training increases, so thus the workers' capacity to perform more efficiently. Also, when the demand for better (or more) trained workers increases, the salary level will also increase. As workers gain training and/or experience, their salaries increase, e.g. on average, a person with a college degree earns much more than someone with just a high school degree. This increase in the level of salaries will lead to an increase in the general price level.
Carla incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following values and adjusted bases:
FMV Adjusted basis
Inventory $35,750 $10,100
Building 153,000 106,500
Land 291,750 375,000
Total $480,500 $491,600
The corporation also assumed a mortage of $153,750 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $320,750.
Required:
a. What amount of gain or loss does Carla realize on the transfer of the property to the corporation?
b. What amount of gain or loss does Carla recognize on the transfer of the property to the corporation?
c. What is Carla's basis in the stock she receives in her corporation?
Answer:
a. The amount of loss does Carla realize on the transfer of the property to the corporation is -$17,100
b. Carla does not recognized any gain or loss on the transfer of the property to the corporation
c. The amount of Carla's basis in the stock she receives in her corporation is $337,850
Explanation:
a. In order to calculate the amount of gain or loss does Carla realize on the transfer of the property to the corporation we would have to use the following formula:
amount of gain or loss=Fair market value of stock received+morgage assume by corporation-Adjusted tax basis of the property transferred
amount of gain or loss=$320,750+$153,750-$491,600
amount of gain or loss=-$17,100
The amount of loss does Carla realize on the transfer of the property to the corporation is -$17,100
b. Carla does not recognized any gain or loss on the transfer of the property to the corporation because the requirements are met and no boot is received in exchange.
c. In order to calculate the amount of Carla's basis in the stock she receives in her corporation we would have to use the following formula:
amount of Carla's basis in the stock=Adjusted tax basis of the property transferred-morgage assume by corporation
amount of Carla's basis in the stock=$491,600-$153,750
amount of Carla's basis in the stock=$337,850
The amount of Carla's basis in the stock she receives in her corporation is $337,850
Three students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are the rates of return on the students’ investment projects:
Student Return
(Percent)
Harry 5
Ron 8
Hermione 20
Assume borrowing and lending is prohibited, so each student uses only personal saving to finance his or her own investment project.
Complete the following table with how much each student will have a year later when the project pays its return.
Student Money a Year Later
(Dollars)
Harry ________
Ron ________
Hermione ________
Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate Three students have each saved $1,000. Each has an .
A student would choose to be a borrower in this market if his or her expected rate of return is ___(Less or Greater)____ than .
Suppose the interest rate is 7 percent.
Among these three students, the quantity of loanable funds supplied would be $_______________, and quantity demanded would be $________
Now suppose the interest rate is 10 percent.
Among these three students, the quantity of loanable funds supplied would be $_______, and quantity demanded would be$_________
At an interest rate of __________, the loanable funds market among these three students would be in equilibrium. At this interest rate,_____(Harry, Hermione, Ron, Ron and Harry, Hermione and Ron)_____ would want to borrow, and ____(Harry, Hermione, Ron, Ron and Harry, Hermione and Ron)_____ would want to lend.
Suppose the interest rate is at the equilibrium rate.
Complete the following table with how much each student will have a year later after the investment projects pay their return and loans have been repaid.
Student Money a Year Later
(Dollars)
Harry ________
Ron ________
Hermione ________
True or False: Only borrowers are made better off, and lenders are made worse off.
True
False
Answer:
Student Money a Year Later:
Harry = Money saved + student return * money saved = $1000 + (5% * 1000) = $1050
Ron = Money saved + student return * money saved = $1000 + (8% * 1000) = $1080
Hermione = Money saved + student return * money saved = $1000 + (20% * 1000) = $1200
Explanation:
a) Student Money a Year Later:
Harry = Money saved + student return * money saved = $1000 + (5% * 1000) = $1050
Ron = Money saved + student return * money saved = $1000 + (8% * 1000) = $1080
Hermione = Money saved + student return * money saved = $1000 + (20% * 1000) = $1200
b) A student would choose to be a borrower in this market if his or her expected rate of return is greater than the interest rate and lends if his or her expected rate of return is less than the interest rate
c) If interest = 7%, Harry would want to lend while Ron and Hermione would want to borrow. The quantity of funds demanded would be $2,000, while the quantity supplied would be $1,000. If interest = 10%, only Hermione would want to borrow. The quantity of funds demanded would be $1,000, while the quantity supplied would be $2,000.
d) At an interest rate of 8%, the loanable funds market among these three students would be in equilibrium. At this interest rate Hermione would want to borrow, and Harry would want to lend.
e) At equilibrium:
Harry = $1000 + (8% * 1000) = $1080
Ron = $1000 + (8% * 1000) = $1080
Hermione = $2,000(1 + 0.20) – $1,000(1 + 0.08) = $2,400 – $1,080 = $1,320
Both borrowers and lenders are better off. No one is worse off
The amount of money the students would have after a year is:
Harry: $1050
Ron: $1080
Hermione: $1200
A student would choose to be a borrower in this market if his or her expected rate of return is greater than the rate of return on investments.
If interest rate is 7%, the quantity of loanable funds supplied would be $100, and quantity demanded would be $200.
If interest rate is 10%, the quantity of loanable funds supplied would be $200, and quantity demanded would be $100.
At an interest rate of 8%, the loanable funds market among these three students would be in equilibrium.
At this interest rate, Hermione would want to borrow and Harry would want to lend.
If interest rate is equilibrium, the amount of money the students would have a year later is:
Harry: $1080
Ron : $1080
Hermione: $1320
Both borrowers and lenders are made better off.
The formula for determining the return on investment is: Amount invested x (1 + rate of return)^n
Harry: 1000 x (1.05) = $1050
Ron: 1000 x (1.08) = $1080
Hermione: 2000 x (1.2) = $2400
Students would choose to lend if the expected return on lending is greater than the rate of return on investment.
At equilibrium, the quantity of loans demanded is equal to the quantity of loans supplied.
When interest rate is 8%, Harry whose return on investment is less than 8%would be willing to lend and hemione would be willing to lend.
Rate of return after a year:
Harry = $1000 x 1.08 = $1080
Ron: 1000 x (1.08) = $1080
Hermione:[ 2000 x (1.2)] $2400 - $1080 = $1320
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