Answer:
Efficiency variance $2,650 unfavorable
Explanation:
Variable overhead efficiency variance: A variance is the difference between a standard cost and the actual cost. Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.
Since the variable overhead is charged using labour hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance
Hours
130,000 units should have taken 9,000
but did take (actual hours) 9,500
Efficiency variance 500 unfavorable
Standard variable overhead rate $5.30
Efficiency variance $2,650 unfavorable
Prahm Corp. wants to raise $4.7 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $48 per share. Its underwriter has set a subscription price of $23 per share and will charge the company a spread of 5 percent. If you currently own 6,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If you choose not to participate in Prahm Corp.'s rights offering and sell your 6,000 rights, you can receive approximately $37,500 based on a subscription price of $23 per share and an ex-rights price of $12.50.
To calculate the value of the rights, you can follow these steps:
1. Determine the Subscription Ratio:
[tex]\[ \text{Subscription Ratio} = \frac{\text{Number of New Shares Issued}}{\text{Number of Existing Shares}} \][/tex]
In a rights offering, the subscription ratio is usually 1:1, meaning for every existing share, shareholders can buy one new share.
2. Calculate the Number of Rights You Hold:
[tex]\[ \text{Number of Rights} = \text{Number of Existing Shares You Own} \times \text{Subscription Ratio} \] \[ \text{Number of Rights} = 6,000 \times 1 \][/tex]
3. Determine the Ex-Rights Price:
[tex]\[ \text{Ex-Rights Price} = \frac{\text{Market Price - Subscription Price}}{1 + \text{Subscription Ratio}} \] \[ \text{Ex-Rights Price} = \frac{\$48 - \$23}{1 + 1} \][/tex]
4. Calculate the Value of One Right:
[tex]\[ \text{Value of One Right} = \text{Ex-Rights Price} - \text{Subscription Price} \] \[ \text{Value of One Right} = \frac{\$48 - \$23}{1 + 1} - \$23 \][/tex]
5. Calculate the Total Value of Your Rights:
[tex]\[ \text{Total Value of Rights} = \text{Number of Rights} \times \text{Value of One Right} \][/tex]
Now, you can substitute the values and calculate:
[tex]\[ \text{Ex-Rights Price} = \frac{\$48 - \$23}{1 + 1} = \frac{\$25}{2} = \$12.50 \]\[ \text{Value of One Right} = \frac{\$25}{2} - \$23 = \$6.25 \]\[ \text{Total Value of Rights} = 6,000 \times \$6.25 \]\[ \text{Total Value of Rights} = \$37,500 \][/tex]
Therefore, if you decide not to participate in the rights offering and choose to sell your rights, you can potentially receive $37,500.
Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period. Seafood 2000 Qty. (lb) 2000 Price ($/lb) 2009 Price ($/lb) Halibut 75,190 2.01 2.33 Lobster 83,080 3.62 3.09 Tuna 50,779 1.87 1.97 (a) Compute a price relative for each type of seafood. (Round your answers to one decimal place.) Seafood Price Relative Halibut Lobster Tuna (b) Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.)
Answer:
a) Price Relative for Halibut is 115.9 (1 d.p)
Price Relative for Lobster is 85.4 (1 d.p)
Price Relative for Tuna is 105.4 (1 d.p)
b) The Weighted Aggregate Price Index for the seafood catch is 98.4.
Explanation:
a) The Price Relative for a good refers to it's current price divided by it's base price times 100. It therefore measures a change in price across different periods.
Writing the formula as stated is,
Price Relative = Current Price / Base Price * 100
Price Relative for Halibut = 2.33/2.01 * 100
= 115.9 (1 d.p)
Price Relative for Lobster = 3.09/3.62 * 100
= 85.4 (1 d.p)
Price Relative for Tuna = 1.97/1.87 * 100
= 105.35
= 105.4 (1 d.p)
b) The Weighted Aggregate Price Index enables us to see how prices in a particular basket has changed over a period of time. It is calculated as follows,
Weighted Price Index = (Sum of Weighted Current Price ) / ( Sum of weighted Base Price) * 100
Sum of Weighted Current Price = (75,190 * 2.33) + (83,080 * 3.09) + ( 50,779 * 1.97)
= 538,124.53
Sum of Weighted Base Price = (75,190 * 2.01) + (83,080 * 3.62) + ( 50,779 * 1.87)
= 546,838.23
Weighted Price Index = (538,124.53 / 546,838.23) *100
= 98.4
The Weighted Aggregate Price Index for the seafood catch is 98.4.
Kim placed an order with her broker for 700 shares of each of three IPOs being offered this week. Each of the IPOs has an offer price of $23. The number of shares allocated to Kim along with the closing prices on the first trading day are: Stock Shares Allocated Price A 700 $ 22.15 B 360 26.43 C 240 28.87 What is Kim's total profit on these three stocks at the end of the first day of trading?
Answer:
$2,049
Explanation:
The profit or loss on a stock portfolio can be determined by by comparing the stock closing value at a specific date and the purchase price.
As per given data
Stock Shares Allocated Price
A 700 $22.15
B 360 $26.43
C 240 $28.87
Purchase price = (700 + 360 + 240 ) shares x $23 = $29,900
First day Closing Value of Portfolio
Stock Shares Allocated Price Value
A 700 $22.15 $15,505
B 360 $26.43 $9,514.8
C 240 $28.87 $6,928.8
Total $31,948.6
Profit on the first day closing = Closing price of Portfolio - Purchase price
Profit on the first day closing = $31,948.6 - $29,900 = $2,048.6
Rugged Sports Enterprises LP is organized as a limited partnership consisting of two individual partners: Hockey LP and Football LP. Hockey LP Football LP Total Beginning-year balance $ 345,000 $ 1,414,500 $ 1,759,500 Annual net income 36,664 751,612 788,276 Cash distribution — (120,000 ) (120,000 ) Ending-year balance $ 381,664 $ 2,046,112 $ 2,427,776 Compute partner return on equity for each limited partnership (and the total) for the year using the above data from Rugged Sports Enterprises LP.
Answer:
Find the answers in the explanation section below
Explanation:
The return on equity for each of the partners and the firm in total is the net income for the year divided by average capital invested in the business in the year.
Average capital or equity is the beginning balance plus ending balance divided by 2:
Hockey LP:
Annual net income is $36,664
average equity=($345,000+$381,664)/2=$363,332
return on equity= $36,664/$363,332 =10.09%
Football LP:
Annual net income is $751,612
average equity=($1,414,500+ $2,046,112)/2=$1,730,306
return on equity=$751,612/$1,730,306 =43.44%
Rugged sports:
Annual net income is $788,276
average equity=($1,759,500+ $2,427,776)/2=$2093638
return on equity=$788276/$2093638 =37.65%
Final answer:
Explanation of calculating partner return on equity for Rugged Sports Enterprises LP.
Explanation:
Partner return on equity (ROE) is a financial metric used to evaluate the profitability of a partner's investment in a partnership.
To calculate ROE for each partner in Rugged Sports Enterprises LP, divide the annual net income by the beginning-year balance and then multiply by 100 to get a percentage:
Hockey LP ROE: (36664 / 345000) * 100Football LP ROE: (751612 / 1414500) * 100Adding the individual ROEs will give you the total partnership ROE for Rugged Sports Enterprises LP for the year.
Which of the following questions would most likely be important for ABC managers to evaluate as they consider expanding into the Asian market? What U.S. firms have successfully partnered with Asian companies? Where will ABC management locate the staff needed to oversee an Asian plant? What are the pricing strategies followed by competitor firms in Asia? How much control does ABC management want to have over their Asian operations?
Answer:
What are the pricing strategies followed by competitor firms in Asia?
Explanation:
In simple words, any corporate entity willing to expand its business to a new market should first evaluate the existing business players. By doing so, the subject entity can get a significant level of understanding of the threats and opportunities available in the market.
Thus, ABC managers should first evaluate the strategies used by the existing participants of the market as after that they can make their plan to how attract other's customers towards ABC.
Segment Revenue Horizontal Analysis Starbucks Corporation reported the following geographical segment revenues for a recent and a prior fiscal year: Recent Year (in millions, rounded) Prior Year (in millions, rounded) Americas $13,293 $11,980 EMEA* 1,217 1,295 China/Asia Pacific 2,396 1,130 Channel Development** 1,731 1,546 Other 526 497 Total $19,163 $16,448 *Europe, Middle East, and Africa **Sells packaged coffee and teas globally a. Prepare a horizontal analysis of the segment data using the prior year as the base year. Round all percents to one decimal place. Enter all amounts in millions. If required, use minus sign to indicate the decreasing values.
Answer and Explanation:
The Preparation of horizontal analysis of the segment data is shown below:-
Starbucks Corporation
Horizontal analysis segment revenue statements
For years ended prior and recent
Recent Prior year/ Increase or Percentage
year Base year Reduced difference
a b c = a - b d = (c÷b) × 100
Revenue
Americas $13,293 $11,980 $1,313 11.00
Europe, Middle East,
and Africa $1,217 $1,295 -$78 -6.00
China/Asia
pacific $2,396 $1,130 $1,266 112.00
Channel
development $1,731 $1,546 $185 12.00
Other $526 $497 $29 5.80
Total $19,163 $16,448 $2,715 16.50
It can be made relevant in horizontal analysis if specific time figures are available for analysis.
Therefore to reach the Percentage difference we simply first made the difference of recent year and prior year/base year after that we divide the increase or reduced by prior year/base year and convert into percentage by multiply of 100.
Final answer:
A horizontal analysis of Starbucks' segment revenue involves calculating the change in revenue between two fiscal years and expressing this as a percentage of the prior year. The analysis shows growth in the Americas, China/Asia Pacific, Channel Development, and Other segments, and a decrease in the EMEA segment.
Explanation:
The student is performing a horizontal analysis of segment revenue data for Starbucks Corporation. The goal is to examine the changes in revenue over two fiscal years, using the prior year as a base year. To do so, one will calculate the difference in revenue for each segment between the recent year and the prior year, and then translate this difference into a percentage of the prior year's figures. Here's a breakdown of the horizontal analysis:
Americas
Recent Year: $13,293 millionPrior Year: $11,980 millionChange: $13,293m - $11,980m = $1,313mPercentage Change: ($1,313m / $11,980m) x 100 = 10.96%EMEA (Europe, Middle East, and Africa)
Recent Year: $1,217 millionPrior Year: $1,295 millionChange: $1,217m - $1,295m = -$78mPercentage Change: (-$78m / $1,295m) x 100 = -6.02%China/Asia Pacific
Recent Year: $2,396 millionPrior Year: $1,130 millionChange: $2,396m - $1,130m = $1,266mPercentage Change: ($1,266m / $1,130m) x 100 = 112.04%Channel Development
Recent Year: $1,731 millionPrior Year: $1,546 millionChange: $1,731m - $1,546m = $185mPercentage Change: ($185m / $1,546m) x 100 = 11.97%Other
Recent Year: $526 millionPrior Year: $497 millionChange: $526m - $497m = $29mPercentage Change: ($29m / $497m) x 100 = 5.84%These calculations reveal the growth or decline for each segment over the period being studied.
Which one of the following statements is correct? Question 19 options: A longer payback period is preferred over a shorter payback period. The payback rule states that you should accept a project if the payback period is less than one year. The payback period ignores the time value of money. The payback rule is biased in favor of long-term projects. The payback period considers the timing and amount of all of a project's cash flows.
Answer:
The payback period ignores the time value of money.
Explanation:
This could primarily be classified to be amongst the major disadvantages of the payback period that it ignores the time value of money which is a very important business concept. In the other hand, the payback period disregards the time value of money. It is determined by counting the number of years it takes to recover the funds invested. Some analysts favor the payback method for its simplicity. Others like to use it as an additional point of reference in a capital budgeting decision framework.
The payback period does not account for what happens after payback, ignoring the overall profitability of an investment.
The correct statement here is that the payback period ignores the time value of money.
Contrary to what is obtainable in other ways of capital budgeting, the payback period is known to not have the need for the time value of money.
The time value of money can be described as the idea that the money that is at hand today has more value than the same amount of money in the future.
This is due to the potential that the money has today in terms of earnings.
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Quantum Company uses the highminuslow method to estimate the cost function. The information for 2017 is provided below: Machineminushours Labor Costs Highest observation of cost driver 1 comma 000 $ 32 comma 000 Lowest observation of cost driver 200 $ 16 comma 000 What is the estimated cost function for the above data? A. y = 32 comma 000 + 32X B. y = 12 comma 000 + 20X C. y = 20 comma 000 + 80X D. y = 16 comma 000 + 40X
Answer:
The correct option is B,y = 12 comma 000 + 20X
Explanation:
Total =fixed cost+(variable cost*X)
where X is quantity of items produced
Variable cost=Highest observation cost-lowest observation/highest machine hours-lowest machine hours
variable cost=$32,000-$16,000/(1000-200)=$20
Substituting the variable cost in highest activity figures,we would arrive at fixed cost
$32000=fixed cost+($20*1000)
$32000=fixed cost+$20,000
fixed cost=$32,000-$20,000=$12,000
The correct option is B,y=12,000+20X
The y stands for total cost
How does a payroll accountant use the information in the General Ledger? (You may select more than one answer. The account balances form the basis for accounting reports. Payroll expenses contained in the General Ledger are not used to make personnel decisions. General Ledger account balances aggregate data to determine payroll costs. The payroll accountant uses General Ledger balances to determine the effectiveness of individual employees.
A payroll accountant uses the General Ledger to manage payroll expenses, prepare accounting reports, and ensure accurate financial statements. They do not assess individual employee effectiveness but focus on overall payroll cost aggregation and reconciliation.
A payroll accountant primarily utilizes information within the General Ledger to manage and analyze the company's payroll expenses. The account balances found in the General Ledger serve as the foundation for various accounting reports and are crucial for accurate financial statement preparation.
Contrary to assessing individual employee effectiveness, which is not the role of a payroll accountant, the General Ledger helps in aggregating data to determine overall payroll costs, ensuring that payroll is correctly accounted for as an expense of the organization in line with the accounting recognition principles.
In practice, the payroll accountant might also use the General Ledger to reconcile payroll expenses and ensure that they are accurately reported in those financial statements, which include the income statement and balance sheet.
They aim to verify that expenses align with budgeted amounts and to check for accuracy in employee compensation, taxes, benefits, and other associated costs. It's important to understand that the personnel decisions or assessing individual employee performance are generally not derived from payroll accounting but rather from human resources management metrics and performance evaluations.
You are the treasurer of Arizona Corp. and must decide how to hedge (if at all) future receivables of 350,000 Australian dollars (A$) 180 days from now. Put options are available for a premium of $.02 per unit and an exercise price of $.50 per Australian dollar. The forecasted spot rate of the Australian dollar in 180 days is:
Answer:
50%
Explanation:
The computation of the probability for put option will be exercised is shown below:
She will exercise at the time when the exercise price i.e $.50 is bigger than the future spot price i.e (20% + 30% = 50%)
So in this case the probability should be 50%
Hence, the correct answer is option c.
All other information which is given is not relevant. Hence, ignored it
What is ecotourism? Write a short essay that includes the following information:
1. your own definition
2. definitions provided by other people and/or organizations; select the one you consider most accurate and complete
3. the main guidelines or requirements for ecotravelers
4. a statement indicating whether you think ecotourism is a good way to protect the environment; why or why not?
Explanation:
1. For me, ecotourism seeks to protect the natural resources that we have in the present so that future generations have the opportunity to take advantage of them, while promoting social, cultural and economic growth of the local population. According to other definitions, ecotourism is an environmentally responsible tourist modality. Its purpose is to visit and enjoy relatively unalterable natural areas as well as any cultural manifestation of the present or past, with the active participation of local populations. Ecotourism includes educational and interpretive content and tries to reduce negative impacts on the natural and socio-cultural environment as much as possible.
-The Ministry of Tourism in Mexico defines Ecotourism in the following way: "they are the trips that have the purpose of carrying out recreational activities of appreciation and knowledge of nature through contact with it." From another perspective, it is a tourist product aimed at those tourists who enjoy natural history, and who want to actively support and participate in the conservation of the environment.
-The environmentalist architect and international consultant of Mexican origin, Héctor Ceballos Lascuráin, popularized in 1993 when he was included in the book “Ecotourism. The Potential and the Pitfalls ”:
"Ecotourism is an environmentally responsible tourist modality, consisting of traveling to or visiting natural areas relatively undisturbed in order to enjoy, appreciate and study the natural attractions (landscape, wild flora and fauna) of said areas, as well as any cultural manifestation ( of the present and the past) that can be found there, through a process that promotes conservation, has a low negative environmental and cultural impact and fosters an active and socioeconomically beneficial involvement of local populations. ”
Ecotourism aims to achieve the preservation and maintenance of natural ecosystems; tourism plays its role as a supplier of oil economic that directly benefits local residents. Community will provide their knowledge and services to tourists and they will benefit economically.
- Ecotourism provides jobs and income to the local population.
-Provide environmental education to tourists.
-Create funds for purchase and supplies for improvement and protection of natural areas. This is beneficial to attract future tourism.
- Motivates the preservation of the environment and the creation of new or larger national parks, biosphere reserve, preservation of forests, recreation areas, beaches and natural attractions.
Third world countries are important recipients of ecotourism. In Brazil nature trips have become one of the new and more great markets of economic income of the country. In south-central Africa, the Rwanda's ecotourism is the third largest source of resources economic.
Final answer:
Ecotourism is conscious travel that conserves environments and benefits locals. It's important for economic development and environmental protection, but it requires strict adherence to sustainability to avoid greenwashing. Ecotourism can be a powerful conservation tool if managed responsibly.
Explanation:
Ecotourism refers to a form of tourism that is directed towards exotic natural environments, intended to support conservation efforts and observe wildlife. My own definition of ecotourism is the practice of visiting natural areas with the intention to learn, appreciate, and participate in conservation while striving to have minimal impact on the ecosystem. This form of tourism generates revenue for conservation, educates the traveler, and directly benefits the economic development of local communities. The International Ecotourism Society provides a more formal definition, describing ecotourism as 'responsible travel to natural areas that conserves the environment, sustains the well-being of the local people, and involves interpretation and education'. Jonathan Tourtellot's concept of geotourism complements this by emphasizing the 'stewardship of place'.
The main guidelines for ecotravelers include respecting local cultures and natural habitats, participating in conservation efforts, minimizing environmental impact, and supporting local economies. It is crucial that ecotourism maintains ethical standards and is accessible, not just to wealthy tourists but also to local residents.
In my opinion, ecotourism is an effective tool for environmental protection as it provides economic incentives to preserve natural areas, engages local communities and travelers in conservation, and fosters greater environmental awareness. However, without rigorous standards, there is a risk of greenwashing, where claims of sustainability are made without substantive actions to back them up. Therefore, the success of ecotourism as a conservation strategy depends on robust management and genuine commitment to sustainability principles.
Our Lady of Sorrows Church, a not-for-profit entity, operates a school in connection with the Church. This year members of the Church decided to construct a new wing on the school with six classrooms. The Church hired an architect and a construction supervisor. The bulk of the labor for construction was donated by Church members who were willing workers but not necessarily skilled carpenters. Materials for the construction cost $600,000 and the paid labor was $200,000. The fair value of the completed building is $2 million. When the building is completed what should be the balance in the asset account "Building" and the account "Contribution Revenue"? A. Building $800,000; Contribution Revenue $0. B. Building $800,000; Contribution Revenue $1,200,000. C. Building $2 million; Contribution Revenue $1,200,000. D. Building $2 million; Contribution Revenue $0.
Answer:
C) Building $2 million; Contribution Revenue $1,200,000.
Explanation:
Volunteer work must be recorded in the In-Kind Contributions account, which is used to record contributions received as volunteer work:
E.g.
Dr Wages and salaries - masonry 1,200,000
Cr In-kind contributions 1,200,000 (or contribution revenue)
Volunteer work does not accumulate revenue, since it must be expensed immediately against the appropriate account. The finished building must be recorded at fair value.
Mr. Bass transferred a building that had an adjusted basis to him of $300,000 and a fair market value of $500,000, to Corporation C solely in exchange for 100% of C’s only class of stock. The building was subject to a mortgage of $100,000, which C assumed for bona fide business purposes. The fair market value of the stock on the date of transfer was $550,000. What is the amount of gain to be recognized by Mr. Bass?
Answer:
$0
Explanation:
This transaction classifies as a § 351 exchange since Mr. Bass is exchanging his asset for 100% of Corporation C's stock.
§ 351 establishes that no gain or loss must be recognized when property is transferred in exchange for stock in a corporation. In order for this exchange to classify as § 351, the new stockholder must assume immediate control of the corporation as established by § 368 (c). This means that at least 80% of the stocks must be exchanged.
Salvia Company recently purchased a truck. The price negotiated with the dealer was $40,000. Salvia also paid sales tax of $2,000 on the purchase, shipping and preparation costs of $3,000, and insurance for the first year of operation of $4,000. At what amount should the truck be recorded on the balance sheet prior to recording depreciation expense
Answer:
The amount the truck should be recorded on the balance sheet prior to recording depreciation expense is $45,000.
Explanation:
The insurance premium of $4,000 would not be added to the cost of the truck. Insurance is usually for one year, it will be treated as prepayment and amortized over one year.
Based on IAS 16 Property, Plant and Equipment, the cost of an asset includes directly attributed costs that are necessary to bring the assets to the condition intended by management. The cost components, based on the standard, are:
purchase price plus import duties and taxesany directly attributable cost to bring the sset to the location and condition to be capable of operating in the manner intended by managementthe initial estimated of the cost of dismantling and removing the item and restoring the site on which it is locatedBased on the above, the cost is $40,000 + $2,000 + $3,000 = $45,000
For which capital component must you make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC)? Equity Preferred stock Debt Water and Power Company (WPC) can borrow funds at an interest rate of 10.20% for a period of seven years. Its marginal federal-plus-state tax rate is 25%. WPC’s after-tax cost of debt is (rounded to two decimal places). At the present time, Water and Power Company (WPC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,050.76 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If WPC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 6.53% 7.51% 5.22% 7.84%
Answer:
Debt
7.65%
6.53%
Explanation:
The debt finance has its capital component adjusted for tax when computing weighted average cost of capital.
The after tax cost of borrowing =pretax cost of debt*(1-t)
t is the tax rate of 25% or 0.25
The after tax cost of borrowing =10.20%*(1-0.25)=7.65%
The pretax cost of bond=rate(nper,pmt,-pv,fv)
nper is the duration of bond which is 5 years
pmt is the annual interest=$1000*10%=$100
pv is the current price of $1,050.76
fv is the face value of $1000
=rate(5,100,-1050.76,1000)=8.70%
After tax cost of bond=8.70% *(1-0.25)=6.53%
QS 23-11 Sell or process further LO A1 A company has already incurred $5,200 of costs in producing 6,100 units of Product XY. Product XY can be sold as is for $31 per unit. Instead, the company could incur further processing costs of $8 per unit and sell the resulting product for $35 per unit. Should the company sell Product XY as is or process it further?
Answer:
It is more profitable to sell te products as-is.
Explanation:
Giving the following information:
Sell as-is:
Selling price= $31
Continue processing:
Selling price= $35
Unitary incremental cost= $8
Units= 6,100
The firsts $5,200 is a sunk cost, this means that the cost will remain the same in both options. It is irrelevant to the decision-making process.
Sell as-is:
Effect on income= 6,100*31= $189,100
Continue processing:
Effect on income= 6,100*(35-8)= $164,700
It is more profitable to sell te products as-is.
Peter's Plants, Inc., specializes in growing Pink Tuberous Begonia flowers. Peter's enters into a contract to deliver 1,000 of its genetically modified pink begonias to Lester's Flowers for $5 a plant. Relying on the contract, Lester's enters into a second contract with a large apartment complex to plant 1,000 pink begonias around its property. A large ice storm demolishes all of Peter's begonia flowers. In turn, Peter's didn't meet its supply to Lester's, and Lester's didn't plant the flowers at the apartment complex. The apartment complex sues Lester's for breach of contract, and Peter's is brought as a cross-claim defendant. What are the arguments Lester's and Peter's should make in defense of not performing under their respective contracts
Answer:
Explanation:
This incident occurred as a result of natural disaster which was beyond the control of the parties involved. Moreover , this incident would have been covered by so many news media and channels which would serve as evidences to buttress their claim.
Therefore , it is easier to make a defense in the fact that the breach occurred due to the natural disaster that was neither forseen nor could be prevented by their effort.
Lester's Flowers and Peter's Plants, Inc. can argue that they were unable to perform their contracts due to the ice storm.
Explanation:In this scenario, both Lester's Flowers and Peter's Plants, Inc. can make arguments in defense of not performing under their respective contracts due to the unforeseeable event of an ice storm. Lester's Flowers can argue that the ice storm prevented them from receiving the pink begonias from Peter's Plants, Inc. and therefore they could not fulfill their contract with the apartment complex. Peter's Plants, Inc. can argue that the ice storm destroyed their flowers and prevented them from meeting their supply obligations to Lester's Flowers.
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Ana was complaining about her workload before the staff meeting began. Later, when the manager announced that twelve parking spaces would be lost as a result of construction across the street, she raised her hand and said, "Then where, exactly, do you expect us to park?" The manager tried to provide some recommendations, but Ana continued to complain until the manager gave up and announced that the meeting was over.
The complete question is:
Ana was complaining about her workload before the staff meeting began. Later, when the manager announced that twelve parking spaces would be lost as a result of construction across the street, she raised her hand and said, "Then where, exactly, do you expect us to park?" The manager tried to provide some recommendations, but Ana continued to complain until the manager gave up and announced that the meeting was over.
What should Ana do to make the next meeting more effective and productive?
Answer:
Bring a positive attitude
Explanation:
In this scenario Ana was already frustrated by the excess workload she has before attending the meeting. So when the manager raised the issue of construction affecting parking spaces she expressed a negative reaction, and kept complaining until the manager gave up and announced that the meeting was over.
For the next meeting to be more productive Ana should bring a positive mindset, and consider recommendations provided by the manager.
This will result in her working collaboratively with the manager to find solutions to the parking space problem.
Under its executive stock option plan, National Corporation granted 15 million options on January 1, 2021, that permit executives to purchase 15 million of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $32 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that the options are exercised on April 3, 2024, when the market price is $36 per share. Ignoring taxes, what journal entry will National record?
Answer and Explanation :
As per the data given in the question,
Before passing the journal entries we need to do the following calculations which are shown below
Total compensation expense = Options granted × Fair value per option
= 15 million × $4 per options
= $60 million
Compensation expense to be recognized each year = $60 million ÷ 3 years
= $20 million
Now
Journal Entries are as follows
On Dec-31,2021
Compensation expense A/c Dr. $20 million
To Paid in capital stock options Cr. $20 million
(Being the compensation expense is recorded )
On Dec-31,2022
Compensation expense A/c Dr. $20 million
To Paid in capital stock options Cr. $20 million
(Being the compensation expense is recorded )
On Apr-3,2024
Cash A/c Dr. $480 million (15 million × $32)
Paid in capital stock options A/c Dr. $60 million
To Common stock Cr. $15 million
To Paid in capital in excess of par Cr. $525 million
(Being the exercise of options is recorded)
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 8 microns per toy at $0.32 per micron Direct labor: 1.2 hours per toy at $6.50 per hour During July, the company produced 5,100 Maze toys. The toy's production data for the month are as follows: Direct materials: 78,000 microns were purchased at a cost of $0.28 per micron. 27,000 of these microns were still in inventory at the end of the month. Direct labor: 6,620 direct labor-hours were worked at a cost of $46,340.
Compute the direct materials price and quantity variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effectCompute the direct labor rate and efficiency variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect
Answer:
1.-3,120 Favorable variance.
2.$704Unfavorable variance
Explanation:
Material price variance:
Actual price is $0.28
Standard price 0.32
Actual quantity 78,000
Material price variance = (Actual price - Standard price) Actual quantity=
(0.28 - 0.32)*78,000
= (-0.04) 78,000= -3,120 Favorable variance.
2. Material quantity variance:
Actual quantity of material used (78,000 - 27,000) = 51,000
Standard quantity of material for the actual level of production (5,100 toys x 8 microns per toy) =48,800 toys
Standard price per unit of material = $0.32
Material quantity variance = (Actual quantity used - Standard quantity of material for actual level of production) Standard price
= (51,000 - 48,800)* $0.32
= (2,200) $0.32 = $704Unfavorable variance
Answer:
Explanation:
Std material Qty allowed (5100*8) = 40800
Std price: 0.32
Actual qty purchased: 78000
Actual qty used: 78000-27000 =51000
Actual price = 0.28
Material price variance= Actual Qty (Std price -Actual price)
78000 (0.32- 0.28) = 3120 fav
Material Qty variance= Std price (Std qty-Actual Qty )
0.32 (40800-51000) = 3264 Unfav
Std labor hours (5100*1.2) = 6120 Hours
Std rate per hour: 6.50
Actual Labor hours: 6620 hours
Actual labor cost = 46340
labor rate variance = Actual hours *Std rate-Actual labor cost
6620 *6.50 - 46340 = 3310 Unfav
Labor efficiency variance = Std price (Std hours -Actual hours )
6.50 (6120-6620 ) = 3250 Unfav
12/31/15 12/31/14 Prepaid Insurance 1,700 1200 Prepaid Rent 3500 4200 Interest Receivable 4200 6,320 Unearned Revenue 6700 8200 Interest Payable 3800 2200 Salaries Payable 11500 15600 Insurance Expense 4800 Rent Expense 9,400 Interest Revenue 22680 Sales revenue earned current period paid in prior periods 15900 Interest Expense ? Salary expense 22290 Insurance Payments 5300 Rent payments 8700 Interest Received 24800 Revenue payments received in advance ? Interest Paid 6530 Salaries Paid ?
Answer:
Revenue payments received in advance $ 14,400
Interest expense for the year $ 8,130
Salaries Paid for the year $ 26,390
Explanation:
Revenue payments received in advance
beginning 8,200
+ received during the period XXX
- earned during the period -15,900
ending unearned revenue 6,700
received: 6,700 + 15,900 - 8,200 = 14,400
Interest expense
Interest Payable beginning 2,200
+ interest expense XXX
- interest paid for the year - 6,530
Interest Payable ending 3,800
expense: 3,800 + 6,530 - 2,200 = 8,130
Beg Salaries Payable 15,600
+Salary expense 22,290
-salaries paid XXX
End Salaries Payable 11,500
paid salaries:
15,600 + 22,290 - 11,500 = 26,390
Individuals derive utility from picnics, p, and kayak trips, k. Assuming that an individual's utility is U(p,k) = k Superscript 0.5k0.5p Superscript 0.5p0.5 and income is $100, what is the marginal rate of substitution (MRS) between picnics and kayak trips? A. MRS = minus−1. B. MRS = 1. C. MRS = minus−one half 1 2 D. There is no substitution because picnics and kayak trips are perfect complements.
Answer:
B) MRS = 1
Explanation:
In this question, we have been given the options as follows:
A) MRS = -1
B) MRS = 1
C) MRS = -1/2
D) There is no substitution because picnics and Kayak trips are perfect complements.
Where, MRS stands for = Marginal Rate of Substitution
First of all, we have to calculate the marginal utility with respect to kayak trips (k) and with respect to picnics (p).
Marginal Utility with respect to P = [tex]\frac{0.5k^{0.5} }{p^{0.5} }[/tex]
Now, calculate with respect to K
Marginal Utility with respect to K = [tex]\frac{0.5p^{0.5} }{k^{0.5} }[/tex]
Now, the formula for MRS is as follows:
Marginal Rate of Substitution = (Marginal Utility with respect to P ÷ Marginal Utility with respect to K)
MRS = [tex]\frac{0.5k^{0.5} }{p^{0.5} }[/tex] ÷ [tex]\frac{0.5p^{0.5} }{k^{0.5} }[/tex] = 1
Hence, the right answer is B) MRS = 1
Final answer:
The marginal rate of substitution (MRS) between picnics and kayak trips, given the utility function U(p,k) = k^0.5p^0.5, is -1, which means the consumer is willing to give up one picnic for one additional kayak trip without changing the level of utility.
Explanation:
The student's question revolves around the concept of the marginal rate of substitution (MRS), which is a pivotal idea in microeconomics and consumer behavior. The given utility function is U(p,k) = k0.5p0.5, and we want to find the MRS between picnics (p) and kayak trips (k). To compute the MRS, we need to find the negative of the slope of the indifference curve at a given point, which is derived by finding the ratio of the marginal utilities of both goods.
The marginal utility with respect to picnics is 0.5k0.5p-0.5 and with respect to kayak trips is 0.5k-0.5p0.5. Thus, the MRS, which is the absolute value of the ratio of marginal utilities, will be:
MRS = -(0.5k0.5p-0.5) / (0.5k-0.5p0.5)
This simplifies to MRS = -1, which is option A. Therefore, the marginal rate of substitution between picnics and kayak trips is -1.
Question 12 (3.333333333 points)
3
In one study, small businesses starting out spent what percentage of sales on
marketing?
6
5 to 10%
8 to 15%
9
15 to 19%
25 to 32%
12
Answer:
The correct answer is 25 to 32%
Answer:
15-19%
Explanation:
Textbook, Chapter 30
A division is considering the acquisition of a new asset that will cost $2,520,000 and have a cash flow of $700,000 per year for each of the four years of its life. Depreciation is computed on a straight-line basis with no salvage value. Ignore taxes. Required: a. & b. What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation? What is the residual income each year if the cost of capital is 8 percent? (Enter "ROI" answers as a percentage rounded to 1 decimal place (i.e., 32.1). Negative amounts should be indicated by a minus sign.)
Answer:
initial investment = $2,520,000
cash flow for years 1 - 4 = $700,000
ROI = (cash flow - depreciation) / investment
depreciation for year 1-4 using straight-line basis = $2,520,000 / 4 = $630,000
ROI year 1 = (700,000 - 630,000) / 2,520,000 = 70,000 / 2,520,000 = 2.8%
ROI year 1 = 70,000 / 1,890,000 = 3.7%
ROI year 1 = 70,000 / 1,260,000 = 5.6%
ROI year 1 = 70,000 / 630,000 = 11.1%
cost of capital year 1 = $2,520,000 x 8% = $201,600
cost of capital year 2 = $1,890,000 x 8% = $151,200
cost of capital year 3 = $1,260,000 x 8% = $100,800
cost of capital year 4 = $630,000 x 8% = $50,400
residual income = excess income - cost of capital
residual income year 1 = $70,000 - $201,600 = -$131,600
residual income year 2 = $70,000 - $151,200 = -$81,200
residual income year 3 = $70,000 - $100,800 = -$30,800
residual income year 4 = $70,000 - $50,400 = $19,600
year net investment cash flow - dep. ROI residual income
1 $2,520,000 $70,000 2.8% ($131,600)
2 $1,890,000 $70,000 3.7% ($81,200)
3 $1,260,000 $70,000 5.6% ($30,800)
4 $630,000 $70,000 11.1% $19,600
Rick Co. had 30 million shares of $1 par common stock outstanding at January 1, 2018. In October 2018, Rick Co.'s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $54 per share. In recording this transaction, Rick would:
Answer and Explanation:
The journal entry to record the given transaction is as follows
Retained earning Dr (0.30 million × $54) $16.2 million
To Common stock (0.30 million × $1) $0.3 million
To Additional paid in capital in excess of par (0.30 million × $53) $15.9 million
(Being the stock dividend is declared)
The computation of the shares after declaring the dividend is
= 30 million × 1%
= 0.30 million
Sheldon, Inc. declared a stock dividend of 50,000 shares on a date when the company's common stock was selling for $ 18 per share. Prior to this date, Sheldon had 500,000 outstanding shares of $ 1 par value common stock. As a result of this stock dividend, Sheldon's common stock will ________, the additional paidminusin capital will ________, and the retained earnings will ________.
Answer:
As a result of this stock dividend, Sheldon's common stock will increase by $900,000, the additional paid in capital will not change, and the retained earnings will decrease by $900,000
Explanation:
Stock dividend is paying dividends by issuing additional stocks to shareholders.
In this case,50,000 shares were issued instead of paying cash dividends.
The stock dividend is financed from retained earnings and the amount involved is $900,000(50000*$18).
However,common stock would witness an increase of $900,000 by a way of credit and retained earnings would reduce by the same amount with no impact in the paid in capital in excess of par since the par value of the stock was not provided,hence it is no par value stock.
Omicron Technologies has $ 40 million in excess cash and no debt. The firm expects to generate additional free cash flows of $ 32 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omicron's unlevered cost of capital is 11% and there are 8 million shares outstanding. Omicron's board is meeting to decide whether to pay out its $ 40 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock. Assume that Omicron uses the entire $ 40 million to repurchase shares. The number of shares that Omicron will have outstanding following the repurchase is closest to:
Answer:
$4.55 million
Explanation:
The calculation of number of shares repurchased is shown below:-
Market value = Enterprise value + Cash
= $32 million ÷ 0.11 + $40 million
= $330.909 million
Share price = Market value ÷ Outstanding shares
= $330.909 million ÷ $8 million
= $41.36 million
Number of shares repurchases = $40 million ÷ $41.36 million × 1,000,000
= 967,118 shares
Outstanding shares = 8 million - $967,118 shares
= $7,032,882
Dividend = Enterprise value ÷ Outstanding shares
= $32 million ÷ $7,032,882
= $4.55 million
"Pawprints Paint recently went public in a best efforts offering. The company offered 160,000 shares of stock for sale at an offer price of $26 per share. The administrative costs associated with the offering were $400,000 and the underwriter's spread was 8 percent. After completing their sales efforts, the underwriters determined that they sold a total of 153,700 shares. What were the net proceeds to the company
Answer:
Net proceeds $3,356,808
Explanation:
The net proceeds to the company would be the gross proceeds from the issue less the underwriting costs and the administrative cost
$
Gross proceeds (153,700 × $26) 3,996,200
Underwriting spread( 8%× 3,996,200) (319,696)
Administrative cost ( 400,000)
Net proceeds 3,356,808
Keating Co. is considering disposing of equipment with a cost of $72,000 and accumulated depreciation of $50,400. Keating Co. can sell the equipment through a broker for $26,000 less 10% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $48,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
a. $24,900
b. $19,920
c. $16,600
d. $11,620
Answer:
Option (c) : $16,600
Explanation:
As per the data given in the question,
For computing the net differential income we need to do following calculations which are shown below:
Sales consideration = $26,000
Commission = $26,000×10%
= $2,600
Net income = $26,000 - $2,600
= $23,400
Lease amount = $48,000
Repair, insurance, and property tax expenses = $8,000
Net income = $48,000 - $8,000
= $40,000
Income if offer of lease accepted = $40,000
Income if equipment is sold through a broker = $23,400
Net differential income from the lease alternative =$40,000 - $23,400
= $16,600
Hence, option (c) : $16,600 is correct answer.
1. Soul Socket Inc. manufactures socket wrenches.
-For next month, the vice president of production plans on producing 4,450 wrenches per day.
-The company can produce as many as 5,000 wrenches per day, but is more likely to produce 4,500 per day.
-The demand for wrenches for the next three years is expected to average 4,250 wrenches per day.
-Fixed manufacturing costs per month total $374,000.
-The company works 22 days a month.
-Fixed manufacturing overhead is charged on a per-wrench basis.
Required: Answer a. – d. below
a. What is the theoretical fixed manufacturing overhead rate per wrench for the next month?
b. What is the practical fixed manufacturing overhead rate per wrench for the next month?
c. What is the normal fixed manufacturing overhead rate per wrench for the next month?
d. What is the master-budget fixed manufacturing overhead rate per wrench for the next month?
Answer:
a. $3.40 per wrench
b. $3.78 per wrench
c. $4 per wrench
d. $3.82 per wrench
Explanation:
a) Theoretical Fixed Manufacturing Overhead.
This is the cost associated with what the company can produce.
They can produce as much as 5,000 wrenches per day for 22 days on a budget of $374,000.
Theoretical Manufacturing Overhead is therefore,
= 374,000 / ( 5,000 * 22)
= $3.40 per wrench.
b. The Practical Fixed Overhead would be the costs to be incurred with the more likely level of production.
Company will more likely produce 4,500 wrenches a day.
Following from a,
= 374,000 / (4,500 * 22)
= 3.7778
= $3.78 per wrench.
c. The normal overhead is the cost associated when the company produces according to demand.
The demand is expected to be 4,250 wrenches for the next 3 years.
Therefore,
= 374,000 ( 4,250 * 22)
= $4 per wrench.
d. The master budget overhead rate is cost associated with the level the company Plans to produce.
Soul Socket plans to produce 4,450 wrenches a day.
Therefore,
= 374,000 (4,450 * 22)
= $3.82 per wrench.