ProTech began business at the start of the current year. The company planned to produce 40,000 units, and actual production conformed to expectations. Sales totaled 37,000 units at $42 each. Costs incurred were:

Variable manufacturing overhead per unit
$
19
Fixed manufacturing overhead
240,000
Variable selling and administrative cost per unit
7
Fixed selling and administrative cost per unit
140,000
If there were no variances, the company's absorption-costing income would be ___________

Answers

Answer 1

Answer:

Net operating profit= $230,000

Explanation:

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

First, we need to calculate the unitary cost:

Unitary production cost= 19 + (240,000/40,000)

Unitary production cost= $25

Now, the income statement:

Sales= 37,000*42= 1,554,000

COGS= (37,000*25)= (925,000)

Gross profit= 629,000

Total selling and administrative cost= (7*37,000) + 140,000= (399,000)

Net operating profit= $230,000


Related Questions

which profession do you prefer to choose for your career engineer or doctor why​

Answers

Answer:

doctor

Explanation:

because if you are an engineer you will work harder then a doctorans you will get more money when your a doc

Which of the following failed to stop the widespread fraud at Wells Fargo

Answers

The widespread fraud at Wells Fargo was not stopped by E. employees' ethics training.

What is employees' ethics training?

Ethics training enables employees to identify and deal with ethical problems.

Occasionally, employees make decisions involving choices or bringing outcomes that may be evaluated as good or bad, right or wrong.

The purpose of ethics training is to eliminate ethical misconduct.

Answer Options:

A. a whistle-blower policy

B. a statement by the CEO

C. a self-reporting policy

D. bonuses for stopping fraudulent behavior by other

E. employees' ethics training

Unfortunately, the widespread fraud at Wells Fargo was not stopped by E. employees' ethics training.

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What is the objective of (i) income statement and (ii) balance sheet?

Answers

(i) The income statement shows revenues and expenses over a financial accounting period.

(ii) Balance sheet is used to keep a track of the debits and credits.

One of the targets is to reveal internet gains and losses as a consequence of commercial enterprise operations and activities over a hard and fast date range. Maximum groups put together an earnings assertion on a month-to-month foundation.

Objectives of Income Statement

It provides a clear picture to the management of the performance of the company during the period and the effect on profitability and whether there is any scope for improvement.It is useful for the potential investor to analyze and decide whether he should invest in the company or not.It also helps the investors to analyze the creditworthiness of the company.It also shows the creditworthiness of a company and its ability to pay off its current obligation and is important for the creditors of the company as it serves as an indicator of the company’s financial standing.

Objectives of Balance sheet

To provide financial informationTo reveal the financial positionTo calculate ratiosTo show the picture of assets and liabilitiesTo show solvency positionInformation about debtors and creditors

Evaluate the value and position of all the assets and liabilities. Recognize the quantity of capital owed to the owner on the 12 months-give up. Use as a reference in case demand for a loan arises. The principle objective at the back of preparing a balance sheet is to provide invested people with a concept of the enterprise’s financial situation, as well as to reveal what the corporation possesses and owes.

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Essay on What Unique Things Would Separate You From Other Applicants Applying For This Money?

Answers

Unique Things that would Separate you from Other Applicants when applying for a loan are:

Proof of income. Investment statements. Employment history.

How can an applicant be outstanding when applying for a loan?

When applying for a loan, there are different criteria that would be followed, by the financial institutions.

One of this is Proof of income, this will be checked to know how much you earn, and this will help to determine the amount of loan that can be granted to you.

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List four sources you can use to locate job leads

Answers

Take a notepad, and write down all the work that you can do that will pay you — this will be your skillset.

Pick out keywords from them. Say “writing" or “coding" “Agile" or “mathematics”. Highlight them in your profile.

Make a list of all the jobs you can do with your above skillset. This you can use the help of job portals. Now, look out for companies that hire for such jobs, and start your search.

While a personalized resume for every job is necessary, your generalized profile on professional networking sites such as LinkedIn or job portal sites such as Naukri needs to be updated accordingly.

Most important — tell everyone you know that you are actively seeking a job, and what type of job you want, along with your skill set. Post it on social media, job sites, etc; you will never know who will help you. People in jobs get notifications about opportunities quite a lot, and if you made it known that you are looking for one, they will let you know.

Keep searching. All my jobs, I got it because I never stopped searching. I search for openings, find the contact details of the company, get in touch with them, and most importantly, I keep on bugging them till I get a satisfactory response from them. For my current job, I called HR every day until they scheduled an interview.

Keep upskilling yourself. Education is never over with your college. There are so many skills that you should equip yourself with, and there are so many tutorials available online and offline for them, like Coursera, Udemy, EdX, etc. Utilize them, sometimes they have free content as well.

1) Social Network (online like Monster.com)

2) Employment agencies

3) Job Fairs

4) Unemployment office

Which of the following is an important consideration in setting up the proper environment to complete tasks on time a limited distractions be free from distractions see a club the workspace or D working whenever time allows

Answers

An important consideration in setting up the proper environment is to be free from distractions. Option B. This is further explained below.

What is the environment?

Generally, the environment in which a human, animal, or plant lives or functions, either temporarily or permanently.

In conclusion, It is essential to remove any potential sources of distraction before beginning the process of creating the ideal atmosphere.

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b) Upscale hotels in the United States recently cut their prices by 20 percent in an effort to bolster dwindling occupancy rates among business travelers. A survey performed by a major research organization indicated that businesses are wary of current economic conditions and are now resorting to electronic media, such as the Internet and the telephone, to transact business. Assume a company’s budget permits it to spend $5,000 per month on either business travel or electronic media to transact business. Graphically illustrate how a 20 percent decline in the price of business travel would impact this company’s budget set if the price of business travel was initially $1,000 per trip and the price of electronic media was $500 per hour. Suppose that, after the price of business travel drops, the company issues a report indicating that its marginal rate of substitution between electronic media and business travel is 1. Is the company allocating resources efficiently? Explain

Answers

It is to be noted that the company is not allocating resources efficiently. See the attached image for the Graphically illustration required.

What is allocation of resources?

This is simply the ability to efficiently distribute resources across all aspects of production.

What is the proof that the company is misappropriating resources?

MRS is the gradient of the budget line is defined by the change in the Y axis divided by the change in the x axis.

In other words, MRS is the number of units of x that a customer is ready to give up in exchange for units of y.

Note that
the MRS fo the budget line is:

-dy/dx

= -10.6/6.25

= -1.6, that is media 1.6 units of media is given for every unit of business travel.

However, the corporation claims that the MRS is -1, which indicates that for every unit of business trip, they give away one unit of media. In other words, they are paying a price equal to the cost of business travel, resulting in a resource misappropriation.

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If a firm's revenues do not cover its average variable costs, then that firm has reached its _________________ . price taking point shutdown point marginal point opportunity margin

Answers

If a firm's revenues do not cover its average variable costs, then that firm has reached its shutdown point.

What is average variable costs?

The average variable cost refers to the variable cost per unit of goods or services produced by a firm.

Average variable cost is total variable cost divided by variable input. Variable input is the input that varies with the output. For example, labor is an example of a variable input.

Average variable cost equals:

1.Average total cost minus average fixed cost.

2. Price of the variable input times the quantity of the variable input.

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Suppose that actual inflation is 3 percent, the Fed's inflation target is 2 percentage points, and unemployment rate is 2 (which is 2 percent below the Fed's full-employment target of 4 percent). According to the Taylor Rule, what value will the Fed want to set for its targeted interest rate?


Instructions: Enter your answer rounded to 1 decimal place.

Answers

The employees rate would be 4% depending on how many days and how many hours they are working the Taylor rule would be 15

with an example, explain why a substantive disagreement may never be resolved

Answers

A substantive disagreement can never be resolved because of the differing opinions of the people involved.

What is a substantive disagreement?It is a disagreement between two or more people.It is a disagreement between people with different opinions and points of view on the same subject.

If the people involved in the substantive disagreement are quite sure that their views are correct, that substantive disagreement can never be resolved, because none of the people involved will surrender to their opponents' point of view.

An example of this is two people arguing over whether the best pet is a cat or a dog, and each person wants to defend one of those animals.

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4. Hyperinflations are extremely rare in countries whose central banks are independent of the rest of the
government. Why might this be so?

Answers

Although hyperinflation is a periodic event for developed economies, it has happened many times throughout history in nations such as China, Germany, Russia, Hungary, and Argentina.

What rate is hyperinflation?

It refers to a condition where the prices of goods and services rise uncontrollably over a defined period of time. In general, the term is employed when the rate of inflation grows at more than 50% a month. Typically, hyperinflation is triggered by a very quick change in the money supply.

What is hyperinflation in history?

Hyperinflation is the immediate, massive, and unmanageable increase in prices. In Hungary just after World War II, prices folded every 15 hours. More recently, in Zimbabwe, prices creased every day. In the uneasy Yugoslavia of the 1990s, inflation hit 50% a year.

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Yes, Hyperinflation are unlikely to occur if the central bank stands independent of the government.

What is Hyperinflation ?

Yes, Hyperinflation are unlikely to occur if the central bank stands independent of the government.

In economics, hyperinflation exists as a very high and typically accelerating inflation. It fast erodes the real value of the local currency, as the expenses of all goods increase. This causes individuals to minimize their holdings in that currency as they usually switch to more durable foreign currencies.

Hyperinflation represents a general rise in prices in an economy as high, unsustainable and out-of-control.Hyperinflation naturally arise when governments utilize the printing of money to invest a lot of their expenditures. This stands highly improbable if the central bank that manages the money supply exists independent of the govt.Though hyperinflation exists a rare incidence for designed economies, it has been brought place several times all through history in countries like Germany, China, Russia, Argentina, & Hungary.

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2. Max z = 3X1 + 5X2+ 4X3 S.t.2X1 +3X2 ≤ 18 2X1 + X2 ≤ 10 3X1 + 2X+4X3 ≤ 15 X1, X2, X3 ≥ 0
Required: Solve the problem and interpret the result?

Answers

The interpretation of the result is that the maximum value of the objective function is 29

How to solve and interpret the result?

The objective function is given as:

Max z = 3x₁ + 5x₂+ 4x₃

The constraints are:

2x₁ +3x₂ ≤ 18

2x₁ + x₂ ≤ 10

3x₁ + 2x₂ +4x₃ ≤ 15

x₁, x₂, x₃ ≥ 0

Subtract the second inequality from the first

2x₁ - 2x₁ + 3x₂ - x₂ ≤ 18 - 10

Evaluate the like terms

2x₂ ≤ 8

Divide by 2

x₂ ≤ 4

Substitute 4 for x₂ in 2x₁ +3x₂ ≤ 18

2x₁ +3*4 ≤ 18

This gives

2x₁ + 12 ≤ 18

Evaluate the like terms

2x₁ ≤ 6

Divide by 2

x₁ ≤ 3

Substitute 4 for x₂ and 3 for x₁ in 3x₁ + 2x₂ +4x₃ ≤ 15

3*3 + 2*4 +4x₃ ≤ 15

This gives

17 +4x₃ ≤ 15

Evaluate the like terms

4x₃ ≤ -2

Divide by 4

x₃ ≤ -0.5

From the constraints, we have:

x₁, x₂, x₃ ≥ 0

So, we set all negative values to 0

This means that:

x₃ ≤ 0

Substitute these values in the objective function

Max z = 3 * 3 + 5 * 4 + 4 * 0

Evaluate

Max z = 29

Hence, the interpretation of the result is that the maximum value is 29

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Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P = 123 - 3Q. The total cost function for each firm is TC(Q) = 3Q. The price charged in this market will be

Answers

The price changed in this market will be mathematically given as

P=93

What is the price change in this market?

P = 123 - 3Q

Generally, the equation for the statement is  mathematically given as

P = 123 - 3Q

Therefore

[tex]\frac{d \pi}{ d \Q1}[/tex]=123-6Q1-30Q2-3=0

Where

Q1=120-3Q2/6

Hence

Q1=120-3(120-3Q1/6)/6

Q1=13.333

In conclusion,

P = 123 - 3(2*13.333)

P=93

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What unique things would separate you from other applications applying for this money

Answers

The unique things that would separate the person from other people that are applying include

well-written essaygood educational backgroundvolunteering work that the person may have engaged in.

What are the required things that the person applying should have?Good educational backgroundVolunteering works would be an added advantageA well-written essayHave good characters and there should be no previous issues that show that the person had broken a law.

Therefore, the above statement would be beneficial for the person applying for the money.

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Upscale hotels in the United States recently cut their prices by 20 percent in an effort to bolster dwindling occupancy rates among business travelers. A survey performed by a major research organization indicated that businesses are wary of current economic conditions and are now resorting to electronic media, such as the Internet and the telephone, to transact business. Assume a company’s budget permits it to spend $5,000 per month on either business travel or electronic media to transact business. Graphically illustrate how a 20 percent decline in the price of business travel would impact this company’s budget set if the price of business travel was initially $1,000 per trip and the price of electronic media was $500 per hour. Suppose that, after the price of business travel drops, the company issues a report indicating that its marginal rate of substitution between electronic media and business travel is 1. Is the company allocating resources efficiently? Explain

Answers

The graphical representation is provided in the attached. It demonstrates how a 20% decrease in the cost of business travel would affect this company's budget if the cost of business travel was initially $1,000 per trip and the cost of electronic media was $500 per hour. This is an exercise related to Resource allocation.

What is resource allocation?

The practice of assigning and managing assets in a way that meets an organization's strategic planning goals is known as resource allocation.

From the information given, is the company allocating resources efficiently?

It would be incorrect to state that the company is allocating resources efficiently.

What is the explanation for the above?

When the cost of business travel is reduced by 20%, the new price of business travel is as follows:

1000 * 20%

= $200

New price =

1,000 - 200

= $800

Recall that the budget limit is $5,000:

Number of travel units assuming the budget is fully allotted for travel

= 5000/800

= 6.25 journeys

Number of travel units assuming the funding is entirely devoted to media

= 5000/500

= 10 media

We can establish a budget line B2 with media on the y-axis and travel on the x-axis based on the information provided.

When the price is reduced, the budget line changes to the right, reading the budget line's slope and steepness.

It should be remembered that the Marginal Rate of Substitution (MRS) is the budget line's gradient. This line is formed from a change in the y-axis and a change in the x-axis.

Thus:

Budget line = - dy/dx

= - 10/6.25

Budget Linen = -1.6

This indicates that for every unit of business trip, we must sacrifice 1.6 units of media.

Remember that the MRS is -1, which implies that for every unit of business trip, the corporation gives away one unit of media.

In other words, they are paying the same price as for business travel, resulting in an inefficient use of resources.

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What will be the end result for the taxpayer who filed his federal income tax return using the 1040EZ form shown below?

Answers

The end result for the taxpayer who filed his federal income tax return using the 1040EZ form shown below will be that he'll owe $180.

What is a federal income tax return?

This refers to the tax return a taxpayer send to the IRS each year through Form 1040, U.S. Individual Income Tax Return.

In this context, the end result for the taxpayer who filed his federal income tax return using the 1040EZ form shown below will be that he'll owe $180.

Therefore, Option A is correct

Missing option "A he'll owe $180 B he'll receive a refund of $173 C he'll owe $3921 D he'll receive a refund of $3921​"

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Ann Hopkins borrowed $60,000 for her child’s education. She must repay the loan at the end of 8 years in one payment with 512% interest. What is the maturity value Ann must repay?

Answers

The Maturity Value that Ann must pay is $89,461.

Assuming the rate of interest is compounded annually.

Given,

Principal value = $60,000 = P

Rate of interest = 5.12% = i

Number of years = 8 = T

Since maturity value = Amount

Now, using the formula for calculating the amount,

Amount = P × {(1+i)^T}

Now, substituting the given values in the above formula for amount we get,

Amount = $60,000 × {(1+0.0512)^8}

             = $60,000 × {(1.0512)^8}

             = $60,000 × 1.49101776418

             = $89,461.0658

             = $89,461 (Approximately)

Hence, The Maturity Value that Ann must pay is $89,461.

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Say, 3 customers enter a store. On the basis of past experience, the store manager estimates the probability that any one customer will make a purchase is 0.30. What is the probability that two of the next three customers will make a purchase?

Answers

The probability that two of the next three customers will make a purchaseis mathematically given as

P(1) =0.441

What is the probability that two of the next three customers will make a purchase?

Generally, the equation for Probablity is  mathematically given as

A)

P(1) = 3 C 1 (0.3)^1 (0.7)^2

P(1) =0.441

B)

n=1000

E (x) =np = 1000x0.3

E (x) =3.00

C)

Variance= mpq

Variance= 300 x0.7

Variance= 210

In conclusion,

P(1) =0.441

E (x) =3.00

Variance= 210

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Darling company estimates that total factory overhead costs will be $130,000 for the year, direct labor hours are estimated to be 26,000 a. For darling company, determine the predetermined factory overhead rate using direct labor hours as the activity base. Per direct labor hour b. During may, darling company accumulated 890 hours of direct labor costs on job 200 and 530 hours on job 305. Determine the amount of factory overhead applied to jobs 200 and 305 in may. Prepare the journal entry to apply factory overhead to both jobs in may according to the predetermined overheed rate.

Answers

In order to calculate the Total factory overhead costs: -

We Know,

Predetermined Factory Overhead Rate =  Total Factory Overhead Costs / Direct Labor HoursFactory overheads applied to Job 305 =  Predetermined overhead rate × Direct labor hours

Statement showing Computations

Particulars                                                           Amount

    a)

Estimated total factory overhead costs         620,000.00 Direct labor hours                                              80,000.00   Predetermined factory overhead rate = 620,000 / 80,000                                             7.75

    b)

Factory overhead applied to Job 200           = 2500 × 7.75                                                      19,375.00 Factory overhead applied to Job 305 = 3000 × 7.75                                                      23,250.00  

JOURNAL ENTRY                             Dr.                      Cr.

Work in Process Dr.                                42,625.00  

To Factory Overhead                                                             42,625.00

Therefore, Total factory overhead cost is 42,625.00.

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Given the true/false statements are true (facts), select the best logical induction made from those statements:
Betsy likes oranges. Jose does not like oranges. Benjamin likes oranges.
a. People only like oranges
b. People like apples and oranges
c. People like all fruit
d. People do and do not like oranges

Answers

The best logical induction that can be made is d. People do and do not like oranges.

What is logical induction?

This refers to making a generalization about a population based on individual pieces of information about the population's members.

Betsy and Benjamin like oranges but Jose does not. This means that people can either like or dislike oranges.

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Discuss how you will use the "8-Step process
to critical thinking" in your personal and
professional life. Provide examples to
support your answers

Answers

I will use the "8-Step process to critical thinking" in my personal and professional life in many ways.

What is the "8-Step process to critical thinking"?

The "8-Step process to critical thinking" includes the following categories:

ReflectionAnalysisInformation AcquisitionCreativityStructuring argumentsDecision makingCommitmentDebate.

The 8-step process involves a process of identifying, observing, describing, questioning, researching, establishing, responding, and sharing knowledge to achieve life improvements.

In my personal and professional life, I need to seek knowledge, information, and understanding to enhance the application of concepts and innovations to living and work.

After acquiring the required information, I will carry out a critical analysis and synthesis before taking action.  Results obtained from my actions must be reflected upon to provide guidance for future activities.

Thus, the "8-Step process to critical thinking" will remain useful in my personal and professional life.

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3. Blackwell bonds have a face value of GHS 1,000 and are currently quoted at 98.4. The bonds have a 5 percent coupon rate. What is the current yield on these bonds?

Answers

The current yield on these bonds is 5.08%.

current Yield = annual Coupon / current Price

Annual coupon = 50

current price = 984

Current yield = 50/984 = 0.0508 i.e. 5.08% current yield.

The current yield of a bond is calculated by using dividing the annual coupon price by the bond's contemporary marketplace price.

A bond's yield to maturity (YTM) is the annualized interest charge that discounts the bond's coupon and faces price payoffs to the marketplace charge. that is, it is the hobby charge that the bondholder receives on the bond.

Current yield. a bond's annual coupon divided via its market price. current yield= annual coupon / bond price. yield to maturity (YTM) is the discount fee that equates a bond's fee with the prevailing value of its destiny cash flows.

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6. Which should be entered on the credit side of the trade receivables control account? A Credit sales B Discount allowed C Interest charged D Returns outwards​

Answers

To be entered on the credit side of the trade receivables control account is a  Credit sales and Discount allowed. Option A n B is further explained below.

What is Credit sales?

Generally, Transactions in which the buyer defers payment are known as credit sales. When a seller intends to sell a product, they often choose this date.

In conclusion, Credit sales and discounts are recorded on the credit side of the trade receivables management account.

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When there is no room for growth within a company, an employee cannot __________. a. Be promoted to new positions horizontally b. Find other jobs from a new employer c. Be considered for salary increases d. Be promoted vertically to new positions

Answers

D. be promoted vertically to new positions

Answer:

D: Be promoted vertically to new positions

Explanation:

finleeoleary is right

The prices of vehicles often increase during tax season, when tax refunds are distributed. Using supply and demand, explain why prices for vehicles increase in tax season.

Answers

Due to tax refunds being received the demand for cars goes up because people see an opportunity to buy a new car. The increase in demand then drives the price up. More demand = more value

The demand for vehicles increases as a result of tax refunds since more people regard them as a chance to purchase a new vehicle. The price rises as a result of the increased demand. More demand equals higher value.

Why You Should Buy a Car during Tax Season?

One of the most annoying aspects of being a working adult is taxes. It can be frustrating to compile all the required paperwork for submitting a tax return and can take hours out of your day. The worry of not knowing if you would owe money is another factor. The simple, lovely tax return, however, is one aspect of tax season that the majority of tax-filing adults look forward to.

Auto dealerships take a chance and purchase fresh inventory toward the end of the preceding year. This entails stocking typical dealerships' shelves with fresh merchandise in an effort to market the newest products.

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At year-end (December 31), Chan Company estimates its bad debts as 0.80% of its annual credit sales of $831,000.
Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $416
account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount
previously written off.
Prepare Chan's journal entries for the transactions.

Answers

Answer:At year-end (December 31), Chan Company estimates its bad debts as 0.80% of its annual credit sales of $831,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $416 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare the journal entries for these transactions. View transaction list 1 Record the estimated bad debts expense. 2 Wrote off P. Park's account as uncollectible. 3 Reinstated Park's previously written off account 4 Record the cash received on account. Credit Note :· journal entry has been entered Record entry Clear entry View general journal

what is the Industry structure of BDMS

Answers

Explanation:

Structure of Database Management System is also referred to as Overall System Structure or Database Architecture but it is different from the tier architecture of Database. The database system is divided into three components: Query Processor, Storage Manager, and Disk Storage

9. How is planning made any why is it important ? Explain .

Answers

Planning is made through a psychological process of rendered thoughts and ideas. Planning is important because for starters, it is a good way of gathering things in one’s mind and having mental organization. It is better to have things planned out than procrastinated because then, stress levels rise, efficiency is slower, and the accuracy of things that go on significantly depletes. Without planning, most of us would not survive because we would be so caught up in what is happening in the moment and how that affects us that we would not be able to process an idea or, as we’re referring to here, a plan. If you need any help, let me know and I will gladly assist you.

Financial statement data for years ending December 31 for tango company follow

Answers

The inventory turnover for Tango company are: 4.8, 5.3.

Inventory turnover

Using this formula

Inventory Turnover = Cost Of Goods Sold / ((Beginning Inventory + Ending Inventory) / 2)

20Y7

Inventory Turnover =$3,864,000 /($770,000+$840,000)/2

Inventory Turnover=$3,864,000/$805,000

Inventory Turnover=4.8

20Y6

Inventory Turnover = $4,001,500 /($740,000+$770,000)/2

Inventory Turnover= $4,001,500 /$755,000

Inventory Turnover=5.3

Therefore the inventory turnover for Tango company are: 4.8, 5.3.

The complete question is:

Financial statement data for years ending December 31 for tango company follow

20Y7  20Y6

Cost of goods sold $3,864,000  $4,001,500

Inventories:

Beginning  of year 770,000  740,000

End of year  840,000  770,000

Determine the turnover for 20Y7 and 20Y6.

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A measure of the burden of continual deficit financing over time is the ratio of:.

Answers

A measurement of the burden of continual deficit financing over time is the ratio of the debt to the GDP.

Budget Deficit

A budget deficit emerges when costs exceed revenue, and can indicate the financial health of a country. The government normally uses the period budget deficit when referring to spending rather than firms or individuals. Accrued deficits form national debt.

One of the direct risks of a budget deficit is inflation, which is the constant boost of price levels. In the United States, a budget deficit can compel the Federal Reserve to release more money into the economy, which feeds inflation.

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