Answer:
Option A
Explanation:
A responsibility model in accounting refers to the program that collects and offers administrators details to assess the performance of department heads. In other expressions, this is a framework used to assess how good departments handle expenditures and handles costs.
The responsibility accountability mechanism is built on the notion that agencies should be properly managed as accurately as possible. The director and upper-level managers should not be responsible for the specific divisions daily activities.
In simple words, The accountability mechanism allows supervisors to manage and assign related costs depending on what they're doing at the moment.
In a responsibility accounting system, managers are held accountable for their departments' controllable costs and outcomes. Reports in such a system only include items that are allocated to a specific responsibility center. Clear lines of authority are essential in this system and evaluation includes the outputs of the departments.
Explanation:In a responsibility accounting system, managers are indeed responsible for their departments' controllable costs, which is option (a). The idea behind this system is to hold managers accountable for specific activities and have them completely own the costs and outcomes. Notably, in this framework, the accounting reports would only include the items that are allocated to a specific responsibility center (option b).
This system of accounting heavily depends on clear lines of authority and responsibility (contrary to option c). However, it could be argued that not all managers at a given level have equal authority and responsibility (contrary to option d), as different departments may have differing degrees of controllable costs. Finally, the outputs (results) of the departments are certainly part of the evaluation process (contrary to option e).
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Which of the following is not correct?
a. A risk averse person might be willing to hold stocks.
b. Other things the same, a portfolio with the stocks of a large number of companies has less risk.
c. Other things the same, the larger a portion of savings a person invests in stocks, the greater his expected return.
d. Diversification can eliminate market risk but not firm-specific risk.
Answer:
Option D is not correct
Explanation:
Diversification is a method which is used to reduce firm-specific risk. Investors try to construct a portfolio which helps to maintain a reasonable profit. Market risk which is the Beta cannot be eliminated and every firm has to bear it, no matter how the portfolio is constructed. For example, if an investor invests in two stocks, if one stock goes down the other will compensate the negative returns. So, diversification is a technique to reduced firm-specific returns.
During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $25,000. On the date of delivery, January 2, the company paid $9,000 on the machine, with the balance on credit at 11 percent interest due in six months. On January 3, it paid $600 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,800. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,100.a. Compute the acquisition cost of the machine.b. Compute the depreciation expense to be reported for Year 1.c. What would be the net book value of the machine at the end of Year 2?
Answer:
a. $28,400
b. $2,530
c. $23,340
Explanation:
a.
The acquisition cost of the machine is the sum of all the expenses that are necessary to put the machine in operation, which are calculated as:
Purchasing cost + Installation cost + Freight cost = 25,000 + 600 + 2,800 = $28,400
b.
Depreciation expenses in year one = (Acquisition cost - Residual value) / Useful life = (28,400-3,100)/10 = $2,530.
c.
Net book value of the machine in year 2 = Acquisition cost - Depreciation expenses in one year x 2 in which Depreciation expenses in one year x 2 = Depreciation in Year 1 x 2 because in Year 1, the depreciation expenses is calculated for full-year calendar.
Thus, Net book value of the machine in year 2 = 28,400 - 2,530 x 2 = 23,340.
The acquisition cost of the machine is $28,400. The depreciation expense for Year 1 is $2,530, and the net book value at the end of Year 2 is $23,340.
Explanation:The acquisition cost of the machine is calculated by adding the invoice price, freight charges, and installation costs. Therefore, the acquisition cost is $25,000 (invoice price) + $600 (freight charges) + $2,800 (installation costs) = $28,400.
The depreciation expense for Year 1 is calculated using the straight-line method, which involves dividing the difference between the acquisition cost and the residual value by the estimated useful life. Therefore, the depreciation expense is ($28,400 - $3,100) / 10 = $2,530.
The net book value at the end of Year 2 would be calculated by deducting two years of depreciation expense from the acquisition cost. Therefore, the net book value is $28,400 - (2 * $2,530) = $23,340.
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Due to political instability in the country of East Gerdon, the strategic leaders at the headquarters of Mako Manufacturing have decided to close all production facilities in the country until stability returns. Mako's managers have formulated a _____-level strategy.
Answer: Corporate
Explanation:
The corporate level strategy is one of the business strategy which is used for maximizing the organization profitability by managing the status of the selling the products and the services in the market.
This types of strategy also helps in maintaining the future financial status of the company and it also increase the competition in the market by selling the unique products and the services.
According to the given scenario, the Mako's manager is using the corporate level strategy as the company decided to closing all the production due to the political instability in the market.
Therefore, Corporate level strategy is the correct answer.
Your firm manufactures motorcycles for the consumer market. You purchase raw materials to build the motorcycles from a variety of suppliers in the U.S. and abroad. The volume of your raw materials purchases is a function of the customer demand for your firm’s motorcycles. Which of the following best describes the type of demand your firm has for these raw materials?
Answer:
The correct answer is letter "E": Derived demand.
Explanation:
Derived demand implies the quantity requested to manufacture a good is directly related to the supply requested from the market. If the demand for the good increases, it means the quantity of the materials needed to manufacture that good will increase as well.
Illustrate the following with supply and demand curves: In March 2015, hogs in the United States were selling for 81 cents per pound, up from 58 cents per pound a year before. This was due primarily to the fact that supply had decreased during the period. Show this change in the figure on the right. 1.) Using the point drawing tool, locate the equilibrium point for 2015 in the U.S. hog market. Label your point 'E'. 2.) Using the line drawingtool, illustrate the change in the U.S. hog market between 2014 and 2015. Properly label your line 'S2015'. (Hint: Perform the steps in the order given.) Carefully follow the instructions above and only draw the required objects.
With the decrease in the supply of the hogs in the market, there was an excess demand due to which the price of hogs in the market rose from the previous level.
Explanation:
In the year 2014, the price of the hogs in the market of the United States of America was 58 cents per pound. But with the decrease in the supply of the hogs in the market of the country, the supply curve of the same shifted towards the left side.
This created a situation of excess demand in the country because the supply in the market could not fulfill the supply of the hogs in the market. So this led to the price of the hogs rise. In the year 2015, there fore the price of hogs in the market was 81 cents per pound. This was higher than the price compared to the previous year.
Which is NOT a step in the cost-benefit analysis? Select one: a. determination of tradable emissions b. calculation of the net profit c. identification of the project d. determination of all impacts
Answer:
The correct answer is A
Explanation:
CBA sands for Cost - Benefit Analysis, is the analysis tool which is used to analysis the cost as well as benefits associated with the project. It comprise of the benefits or advantage of the course of action and then these are compared with the cost linked with it.
The steps followed in the analysis are:
1. Brainstorm Benefits and Cost
2. Allocate monetary value to the benefits
3. Allocate monetary value to the Costs
4. Compare Costs with Benefits
Therefore, determination of tradable emissions is not the step.
Option a. determination of tradable emissions is not the step in the cost-benefit analysis.
The following are the steps of the cost-benefit analysis.
Net profit computation.Determination of all impacts. Project identification. The option 1 is known as benefit-cost analysis.Therefore we can conclude that Option a. determination of tradable emissions is not the step in the cost-benefit analysis.
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The Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2018, the company decided to change to the average cost method. Data for 2018 are as follows: Beginning inventory, FIFO (6,500 units @ $45.00) $ 292,500 Purchases: 6,500 units @ $51.00 $ 331,500 6,500 units @ $55.00 357,500 689,000 Cost of goods available for sale $ 981,500 Sales for 2018 (11,000 units @ $85.00) $ 935,000 Additional information: The company's effective income tax rate is 30% for all years. If the company had used the average cost method prior to 2018, ending inventory for 2017 would have been $266,500. 8,500 units remained in inventory at the end of 2018. Required: 1. Prepare the journal entry at the beginning of 2018 to record the change in principle. 2. In the 2018–2016 comparative financial statements, what will be the amounts of cost of goods sold and inventory reported for 2018?
Answer:
Retained earnings 26,000 debit
Inventory 26,000 credit
--to adjust for change of method--
Average cost per unit $49
COGS: 11,000 units x $ 49 = 539,000
Ending Inventory 8,500 units x $ 49 = 416,500
Explanation:
Beginning inventory, FIFO (6,500 units @ $45.00) $ 292,500
Beginning inventory Average $ 266,500
Difference between methods 26,000
We will adjust inventory against retained earnings as a lower or higher inventory will represent higher or lower COGS respectively
beginning inventory $ 266,500
Purchases:
6,500 units @ $51.00 $ 331,500
6,500 units @ $55.00 $ 357,500
689,000
Total good avilable for sale: 955,500
Units available for sale: 19,500
Average cost per unit: 955,500 / 19,500 = $ 49
COGS: 11,000 x $ 49 = 539,000
Ending Inventory 8,500 x $ 49 = 416,500
After determining its profit-maximizing quantity of output, how does a monopolistic competitor choose its price? Group of answer choices
a. The firm will look at the demand curve to find out what it could charge for that quantity of output.
b. The firm will look at the average cost curve to find out what it could charge for that quantity of output.
c. The firm will look at the marginal revenue curve to find out what it could charge for that quantity of output.
Answer:
a. The firm will look at the demand curve to find out what it could charge for that quantity of output.
Explanation:
The monopolistic competition market has a large number of competing vendors and producers. In this type of market, firms compete by producing substitute (differentiated) goods that can replace each other, not homogeneous goods, while competing. The production of differentiated goods gives this market a competitive and monopolistic character, but because there are many vendors in the market, prices cannot be determined by a small number of companies. What is important in the monopolistic competition market is that the goods are attractive, preferable and indispensable. Characteristics of monopolistic competition:
1) Many sellers.
2) Differentiated products, products are not exactly the same as in the competitive market. Firms are not the determinants of the price.
3) Companies can enter and exit the market without restrictions. This traffic continues until the profit of the firms is worthless.
A profit-maximizing monopolistic competitor will have a target of the quantity in that case, marginal revenue should be equal to marginal cost and then he monopolistic competitor will start generate that level of output and finally, will decide charge the price which is indicated by the firm's demand curve. That demand curve will not be flat but downward sloped.
On January 1, Year 1, Toy Factory purchases a patent for a printing process for $40,000. The original legal life of the patent was 10 years, and there are 8 years remaining. However, due to expected technological obsolescence, the company estimates that the useful life of the patent is only 5 more years. What will be the amortization expense for the patent in Year 1?
Answer:
Annual depreciation= $8,000
Explanation:
Giving the following information:
On January 1, Year 1, Toy Factory purchases a patent for a printing process for $40,000.
The company estimates that the useful life of the patent is only 5 more years.
To calculate the depreciation for the year, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= 40,000/5= $8,000
You have a project that will involve the purchase of real estate and renovation of the real estate.
Your our analysis indicates the project should have an IRR of 10 percent. Financing will consist of a mortgage (debt) of $90,000 dollars which represents 80 percent of the financing. The pretax cost of debt is estimated to be 8.5 percent. The remaining proportion of the financing will come from selling shares of your stock portfolio. Historically, your return has been 11 percent. Your marginal tax rate is 21 percent.
How would excel be used to figure this out?
Should you pursue the project?
Answer:
Yes the company should you pursue the project.
Explanation:
This problem requires us to tell whether we should pursue the project or not. The IRR of the project is given in the question and WAAC is required to be calculated. The company should accept the project if IRR (10%) is greater than or equal to company's WAAC.
So let calculate waac first.
WAAC = 80%* 8.5% (100% -21%) + 20% * 11%
= 5.4% + 2.2 %
= 7.6%
based on above mentioned rule the company should pursue the project.
An index fund manager is expected to generate a return that:
Answer:
An index fund manager is expected to generate a return that matches the particular index he has chosen.
Explanation:
An index fund manager is required to generate a return that matches a chosen index so as to cover all the expenses relating to the index he is managing.
When a customer enters a store there are three outcomes that can occur: buy nothing, buy a small amount, or buy a large amount. In this situation, if a customer buys a large amount, he or she cannot also buy a small amount or buy nothing. Thus the events are:
A) all inclusive.
B) mutually exclusive.
C) dependent events.
D) independent.
Final answer:
The outcomes of a customer's shopping behavior are mutually exclusive because each outcome excludes the others from occurring simultaneously, and considering all possibilities, they are exhaustive, leading the sum of their probabilities to equal 1. Hence, the correct option is B.
Explanation:
When a customer enters a store, they have three possible outcomes: buy nothing, buy a small amount, or buy a large amount. These outcomes are mutually exclusive because the occurrence of one outcome excludes the possibility of any other occurring at the same time. For instance, if a customer buys a large amount, it is not possible for them to also buy a small amount or buy nothing within the same shopping instance. Mutually exclusive events have a property such that P(A AND B) = 0, which means that the probability of both events happening at the same time is zero.
Moreover, when we consider all possible outcomes and they are mutually exclusive like in this scenario, they should also be exhaustive. This implies that the sum of the probabilities of all possible outcomes is equal to 1. This concept is a part of the foundational axioms of probability, where each event in a sample space is part of an exhaustive and mutually exclusive partitioning of the possible outcomes.
Shaw Company sells goods that cost $300,000 to Ricard Company for $410,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $40,000. The standalone selling price of the goods is $370,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete.
a. (a) Prepare the journal entry (if any) to record the sale on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
b. Shaw prepares an income statement for the first quarter of 2017, ending on March 31, 2017 (installation was completed on June 18, 2017). How much revenue should Shaw recognize related to its sale to Ricard?
The journal entry on January 2, 2017, should be the debiting of Accounts Receivable for $410,000 and the crediting of Sales for $370,000 and Unearned Revenue for $40,000. In terms of revenue recognized in the first quarter of 2017, it should be only the revenue from the sale of the goods, totaling $370,000, as the installation service is not yet completed.
Explanation:The question relates to the topic of revenue recognition. In this scenario, Shaw Company has two distinct performance obligations: the delivery of goods and the installation service. The total transaction price of $410,000 should be allocated between these two obligations based on their standalone selling prices (in proportion to their relative standalone selling prices).
Journal Entry on January 2, 2017: Debit Accounts Receivable $410,000; Credit Sales (Goods) $370,000; Credit Unearned Revenue (Installation) $40,000. The revenue recognized in the first quarter of 2017, ending March 31st, 2017 should be calculated based on the percentage of completion of the installation. However, as the installation is not completed by the end of March, Shaw shouldn’t recognize any of the installation income yet. The only recognized income would be from the sale of goods which amounts to $370,000.Learn more about Revenue Recognition here:
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Element Corporation reported the following equity section on its current balance sheet.
The common stock is currently selling for $20.25 per share.
Common Stock, $5 par, 337,000 shares authorized, 157,000 shares issued and outstanding $785,000
Paid-In Capital in Excess of Parlong dashCommon 140,000
Retained Earnings 301,000
Total Stockholders' Equity $1,226,000
After a 2-for-1 stock split, what is the number of issued shares?
Answer:
314,000 shares
Explanation:
The number of issued shares in case of 2 for 1 stock split would be
= Number of issued shares × stock split ratio
= 157,000 shares × 2
= 314,000 shares
Simply we multiply the Number of issued shares with the stock split ratio so that the accurate number of shares can come
All other information which is given is not relevant. Hence, ignored it
Final answer:
The number of issued shares of Element Corporation after a 2-for-1 stock split will be 314,000 shares, doubling from the original 157,000 shares.
Explanation:
After a 2-for-1 stock split, the number of issued shares of Element Corporation will double. Originally, there were 157,000 shares issued and outstanding. When a company performs a 2-for-1 stock split, each share is divided into two, so the new number of issued shares will be 314,000 (157,000 shares x 2).
the countries of Orion and Scorpius are small mountainous nations. Both produce granite and blueberries. Each nation has a labor force of 800. The table below gives production per month for each worker in each country. Assume productivity is constant and identical for each worker in each country.
Tons of Granite Bushels of Blueberies
Orion workers 6 9
Scorpius workers 3 7
(1) ______ has a comparative advantage in the production of granite
(2) ______ has a comparative advantage in the production of Blueberies.
Answer:
Orion has a comparative advantage in the production of granite .
Scorpius has a comparative advantage in the production of Blueberries.
Explanation:
We have the relative cost for Orion of producing one Ton of Granite is: 9/6 = 1.5 Bushels of Blueberries, while the relative cost for Scorpius of producing one ton of Granite is : 7/3 = 2.33 Bushels of Blueberries. Thus, Orion has comparative advantage of producing Granite.
We have the relative cost for Orion of producing one Bushels of Blueberries is: 6/9 = 0.67 ton of granite, while the relative cost for Scorpius of producing one Bushels of Blueberries is : 3/7 = 0.43 ton of granite. Thus, Scorpius has comparative advantage of producing Blueberries.
Orion has a comparative advantage in both the production of granite and blueberries as its workers are more productive in producing both goods in comparison to Scorpius.
Explanation:In the context of this question, comparative advantage refers to a country's ability to produce a particular good more efficiently (using less labor) relative to other goods. To determine who has a comparative advantage, we compare labor productivity of each worker in both countries.
(1) Orion workers produce 6 tons of granite compared to 3 tons by Scorpius workers, so Orion has a comparative advantage in the production of granite.
(2) A comparison of blueberry production shows that an Orion worker produces 9 bushels of blueberries, while a Scorpius worker produces 7. So, Orion also has a comparative advantage in the production of Blueberries.
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A company is planning to purchase a machine that will cost $29,400 with a six-year life and no salvage value. The company uses straight-line depreciation. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?
Sales............................................................................ $117000
Cost:
Manufacturing...................................... $52,000
Depreciation on machine...................... 4900
Selling and administrative expenses..... 39,000 96,800
Income before Tax....................................................... 20,200
Income Tax(40%)......................................................... 8080
Net Income..................................................................$12,120
a. 6.00 years
b. 4.85 years.
c. 2.43 years.
d. 173 years.
The accounting rate of return (ARR) for the machine is calculated to be 41.22%. However, none of the provided options a-d match this calculation, suggesting there's an error with the options given. ARR measures the profitability of an investment in percentage terms.
Explanation:To calculate the accounting rate of return (ARR) for the machine, we use the formula:
ARR = (Average Annual Profit / Initial Investment) x 100
First, we calculate the average annual profit (Net Income) after depreciation and taxes, which is given as $12,120. The initial investment is the cost of the machine, which is $29,400. Plugging these into the formula gives us:
ARR = ($12,120 / $29,400) x 100
ARR = 41.22%
The ARR is used to determine the profitability of an investment, and it is clear that none of the choices (6.00 years, b 4.85 years, c 2.43 years, d 173 years) represent a rate, so there seems to be an error in the provided options.
On the basis of the given data and standard ARR calculation, none of options a-d are correct, as they do not reflect a percentage rate of return. The computed ARR here is 41.22%.
When auto manufacturer BMW purchased the RollsminusRoyce brand name, BMW had to hire and train a new staff of assembly workers. The new workers were paid $ 23.00 per hour, worked a total of 7 comma 000 hours, and produced 1 comma 600 cars. BMW budgeted for a standard labor rate of $ 28.00 per hour and 3.25 direct labor hours per car. What is the direct labor efficiency variance for the RollsminusRoyce division? A. $ 50 comma 400 favorable B. $ 50 comma 400 unfavorable C. $ 41 comma 400 unfavorable D. $ 41 comma 400 favorable Click to select your answer.
Answer:
B. $ 50 comma 400 unfavorable
Explanation:
The formula to compute the labor efficiency variance is shown below:
= Standard labor rate × (Standard hours for actual output - Actual hours)
where,
Standard labor rate is $28
Standard hours for actual output would be
= 1,600 cars × 3.25 direct labor hours per car
= 5,200 hours
And, the actual hour is 7,000 hours
Now put these values to the above formula
So, the value would equal to
= $28 × (5,200 hours - 7,000 hours)
= $50,400 unfavorable
The ability to generate future revenues and meet long-term obligations is referred to as:________a. Liquidity and efficiency.b. Solvency.c. Profitability.d. Market prospects.
Answer:
The correct answer is B
Explanation:
Solvency is the term which is described or defined as the ability or the capability of the company or firm to meet or fulfill its long term debts and also the financial obligations.
It is vital for staying in the business as it states the ability of the company for continuing the operations into the foreseable future.
Therefore, the ability for generating the future revenues or profits and meet the long term liabilities is known as the Solvency.
Other things being equal, if the reserve ratio is raised from 10 percent to 20 percent Select one: a. maximum potential value of the money multiplier falls from 10 to 5. b. minimum potential value of the money multiplier rises from 0.10 to 0.20. c. minimum potential value of the money multiplier falls from 100 to 50. d. maximum potential value of the money multiplier rises from 10 to 20.
Answer:
A
Explanation:
Explanation of how an increase in the reserve ratio impacts the money multiplier, leading to a decrease in its maximum potential value.
The higher the required reserve ratio, the lower the deposit multiplier.
For example, with a required reserve ratio of 0.1, the deposit multiplier is 10. If the ratio increases to 0.2, the deposit multiplier would be 5.
Therefore, if the reserve ratio is raised from 10% to 20%, the maximum potential value of the money multiplier falls from 10 to 5.
Which of the following is most likely considered a weakness of present value models?
a.Present value models cannot be used for companies that do not pay dividends
b.Small changes in model assumptions and inputs can result in large changes in the computed intrinsic value of the security
c.The value of the security depends on the investor’s holding period; thus comparing valuations of different companies for different investors is difficult
Answer:a
Explanation:
One weakness of present value models is that small changes in model assumptions and inputs can lead to significant changes in valuation. Additionally, comparing valuations of different companies for different investors is challenging due to the dependence on the investor's holding period.
Explanation:A weakness of present value models is that small changes in model assumptions and inputs can result in large changes in the computed intrinsic value of the security. This means that even slight variations in factors such as interest rates or dividend expectations can significantly impact the valuation of a security.
Furthermore, the value of a security depends on the investor's holding period, making it difficult to compare valuations of different companies for different investors. Each investor may have different expectations and investment strategies, which can lead to different valuation outcomes.
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The current price of silver is $45 per ounce and the cost of storing this silver is $1 per ounce payable at the end of 9 months. Assuming that interest rates are 12% per annnum continuously compounded for all maturities, what is the upper bound for the futures price of silver for delivery in one year?a)$57.82b)$51.77c)$41.82d)$47.77
Answer:
The answer is b)$51.77.
Explanation:
The upper bound of future price is equal to the future value of:
- The current price of silver compounded continuously for one-year ( that is, one period); plus
- The future value of the storing cost compounded continuously for 0.25 year ( that is, 3 months calculated as 12 months minus 9 months).
Thus, upper bound of future price is calculated as below:
45 x e^12% + 1 x e^[12% x(3/12)] = 50.737 + 1.030 = $51.77 ( round to 2 decimal places).
So, the answer is b) $51.77.
Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $50,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $2,100 every six months over the subsequent eight years, and finally pays $2,400 every six months over the last six years. Bond N also has a face value of $50,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 10 percent compounded semiannually. What is the current price of Bond M and Bond N? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Answer
Current Price of Bond M = $25,202
Current Price of Bond N = $7,102
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
g. Which inventory method would you recommend for reporting for income tax purposes to minimize taxable income? Why? 3. The company is operating in an inflationary environment. Which method should the company use to maximize inventory valuation? Why? 4. Looking at the purchasing volume versus demand, what guidance would you offer to the operations manager regarding inventory management and cash flow?
Answer:
g.- LIFO as the cost of good sold will be based on the lattest unit thus, the more expensive under inflationary environment.
3.- FIFO as will declare cost the oldest unit (cheapest) and keep under inventory the newest (more expensive) units
4.- It should minimize holding and order cost using the economic quantity order
Then it will have to match their payment cycle with the collection cycle.
It will be better to pay just before 30 days so it pays nominal but after 30 days it will benefit from the inflation thus, it will be like 2% or 3% cheap as inflation per month is abotu that. I would be like paying with discount
Is important to do not led the invoice outdate as the supplier will charge high interest to compensate the inflation (inlation premium )
Explanation:
Which of the following is an example of the assetasset demand for money?
(A) Marianne uses money in her checking account to buy groceries every week.Marianne uses money in her checking account to buy groceries every week.
(B) Joan believes that gold is an excellent store of value.
(C) Since the stock market has been volatile lately comma Jean holds most of her savings in a bank account.Since the stock market has been volatile lately, Jean holds most of her savings in a bank account.
(D) Carla keeps $ 2,000 in a bank account in case of emergencies.Carla keeps $2,000 in a bank account in case of emergencies.
Answer:
(D) Carla keeps $ 2,000 in a bank account in case of emergencies.
Explanation:
In general, we could say that money have these necessary functions on the economy:
1) Money is a medium of exchange
2) Money is a measure of value
3) Money is a store of value
Depending upon the functions above, there will be appearing of the demand for the money. Now, there are 2 types of demand for money:
1) Transactional Demand- is the keeping the money for purchasing. It means you always need some money to conduct your transactions as well. So we could say that, a medium of exchange function of money coincides with this demand type.
2) Asset Demand-is something about keeping the money as a financial asset or creating a store of value for later use. So the liquidity of the money is very essential for this type of demand. Additionally, measure of value and store of value functions will be the characteristics of this type of demand.
In the option A, the point is about purchasing so it is transaction demand. In the option B, there is not any talking about storing the money, but even if he stores the money as gold investment, it will not be liquidity meaning that is why not the asset demand because the prices and values of gold will be changed easily according to the currency. In the option C, the case is about the stocks so there is volatility and the volume of the money will be very volatile and this cannot be considered as an asset. However, in the option D, there is money on the bank account just the store of cash and it could be used as an asset on emergent moments.
Kingbird, Inc. reported net income of $195,450 for 2022. Kingbird, Inc. also reported depreciation expense of $33,810 and a loss of $5,040 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $14,650 for the year, a $16,350 increase in accounts payable, and a $4,030 increase in prepaid expenses.
Prepare the operating activities section of the statement of cash flows for 2022. Use the indirect method.
Kingbird, Inc.'s cash flow from operating activities for the year 2022 is calculated at $231,970, attained through adjustments in net income, depreciation, losses from asset disposals and changes in account receivables, payables and prepaid expenses.
Explanation:To calculate the cash flow from operating activities using the indirect method, we start with the net income and add or subtract changes in balance sheet items. The indirect method adjusts net income for items that affected reported net income but did not affect cash. Here are the calculations:
Start with net income: $195,450 Add depreciation expense: $195,450 + $33,810 = $229,260 Add loss from disposal of plant assets: $229,260 + $5,040 = $234,300 Subtract increase in accounts receivable: $234,300 - $14,650 = $219,650 Add increase in accounts payable: $219,650 + $16,350 = $236,000 Subtract increase in prepaid expenses: $236,000 - $4,030 = $231,970So, the cash flow from operating activities according to the indirect method is $231,970.
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Mexico's real GDP was 1,761 billion pesos in 2005 and 1,822 billion pesos in 2006. Mexico's population growth rate in 2006 was 1.5 percent. Calculate Mexico's economic growth rate and growth rate of real GDP per person in 2006.
Answer:
The economic growth rate of Mexico in 2006 was 3.46%
Growth rate of real GDP per person =1.96%
Explanation:
In order to find the economic growth rate we will use the formula
(Real GDP in 2006-Real GDP in 2005)/Real GDP in 2005
(1822-1761)/1761
=61/1761=0.034=3.46%
The real GDP growth per person growth rate can be calculated by
(2006 Economic growth rate- Population growth rate)
3.46-1.5=1.96
Upton Umbrellas has a cost of equity of 12.7 percent, the YTM on the company's bonds is 5.6 percent, and the tax rate is 40 percent. The company's bonds sell for 104.3 percent of par. The debt has a book value of $441,000 and total assets have a book value of $963,000. If the market-to-book ratio is 3.07 times, what is the company's WACC?
Answer:
WACC = 9.76%
Explanation:
First lets calculate the Market value of a firms equity and debt.
Market value of Equity = 963,000 * 3.07 = $2,956,410
Market value of Debt = 441,000 * 3.07 = $1,353,870
WACC =
Weight of equity * return on equity + weight of debt * return on debt * (1 - tax rate)
This gives us,
=[(2956410/(2956410 + 1353870))*0.127]+[(1353870/(2956410+1353870)*0.056] * (1 - 0.40)
WACC = 0.087 + 0.0106 = 0.0976 or 9.76%
Hope that helps.
A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $9,000 indicates that Dept. Y had a direct expense of $1,000 for deliveries and Dept. Z had no direct expense. The indirect expenses are $8,000. The analysis also indicates that 40% of regular delivery requests originate in Dept. Y and 60% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are:
Answer:
$4,200 and $4,800
Explanation:
The computation of the Departmental delivery expenses are shown below:
For Dept. Y
= Direct expense + indirect expense × given percentage
= $1,000 + $8,000 × 40%
= $1,000 + $3,200
= $4,200
For Dept Z
= Indirect expense × given percentage
= $8,000 × 60%
= $4,800
Simply we multiplied the expenses with the percentage given
Department Y's total delivery expenses would be $4,200 and Department Z's would be $4,800.
Explanation:The total delivery expense for the company is $9,000 out of which Dept. Y incurred a direct expense of $1,000. This leaves $8,000 as indirect costs. The indirect expenses are then divided based on the percentage of deliveries originating from each department: 40% for Department Y and 60% for Department Z. Therefore, Department Y's total delivery expenses would be $1,000 (direct) + $8,000 * 40% (indirect) = $4,200. Department Z, which had no direct expenses, would have expenses equal to $8,000 * 60% (indirect) = $4,800.
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Mervon Company has two operating departments: Mixing and Bottling. Mixing has 350 employees and Bottling has 350 employees. Indirect factory costs include administrative costs of $162,000. Administrative costs are allocated to operating departments based on the number of workers. Determine the administrative costs allocated to each operating department.
Answer:
Allocated administrative cost for mixing is $81000
And allocated administrative cost for for bottling is $81000
Explanation:
We have given total number of employs for mixing = 350
And total number of employs for bottling = 350
Administrative cost = $162000
So total number of employs = 350+350 = 700
So allocation base for mixing [tex]=\frac{350}{700}=0.5[/tex]
So allocated amount for mixing = 0.5×$162000 = $81000
Allocation base for bottling = [tex]=\frac{350}{700}=0.5[/tex]
So allocated amount for bottling = 0.5×$162000 = $81000
Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department. In June, unit costs incurred by the Mixing Department amounted to $4.00 per unit. Unit costs transferred to the finished goods warehouse during the month amounted to $22. Work-in-process inventories are reduced to zero each month. The entry to record the sale of 3,500 units in June would include:
To record the sale of 3,500 units by Evans Products, you calculate the total cost of goods sold (COGS) by multiplying the number of units sold by the unit cost, resulting in a COGS of $77,000. The journal entry would involve debiting the Sales account and crediting Revenue for the total sales amount, and debiting COGS and crediting Inventory for $77,000.
The question involves the accounting process of recording the sale of goods in a company that uses a process costing system. The unit costs incurred by the Mixing Department are $4.00 per unit, and the costs transferred to the finished goods warehouse are $22 per unit. Since work-in-process inventories are reduced to zero each month, and the sale involves 3,500 units, to record the sale, you'd first need to calculate the total cost of the goods sold (COGS) which would be 3,500 units x $22/unit. Then, you would debit the Sales account and credit the Revenue account for the total sales amount, and debit the COGS account and credit the Inventory account for the total COGS.
Using accounting equations:
Total COGS = Number of units sold x Cost per unit
Total COGS = 3,500 units x $22/unit
Total COGS = $77,000
The journal entry would be:
Debit Sales (for the total sales amount)
Credit Revenue (for the total sales amount)
Debit COGS (for $77,000)
Credit Inventory (for $77,000)
Evans Products records the sale of units by debiting Accounts Receivable or Cash and crediting Sales Revenue for the total sales amount. It additionally debits Cost of Goods Sold and credits Finished Goods Inventory for the cost associated with the number of units sold, in this case, 3,500 units at $22 each.
The subject of this question involves understanding process costing in the manufacturing industry, specifically within a company named Evans Products. The student is asked about the accounting entry related to sales in the context of a company that has a process costing system with two processing departments.
In this scenario, Evans Products has no remaining work-in-process inventories at the end of the month, and the unit costs after processing in the Mixing Department and Finishing Department sum up to $22 per unit. For the sale of 3,500 units, the total cost of goods sold (COGS) will be 3,500 units multiplied by $22, which is $77,000. Assuming the sales revenue per unit is greater than or equal to COGS, the entry to record sales would include a debit to Accounts Receivable or Cash (depending on whether the sale was on credit or for cash), and a credit to Sales Revenue for the total sales amount. Additionally, a debit to Cost of Goods Sold and a credit to Finished Goods Inventory would be recorded for $77,000.