Answer:
1. Yes he has a liability that should be.
Explanation:
Ownership would be shifted to buyer as soon as product has been shipped.
From question we saw that the car load has been shipped from Albuquerque in December 24, so ownership has been moved to Milwaukee branch.
1. So yes my client has a liability which should be recorded on that date. The date is December 31st and the amount is $36800
2. My client client may want to postpone the recording based on these reasons
a. Based on wanting to keep current ratio at a particular level. The value of additional recovery and account payable would then affect it
b. So as to show decreased amount of account payable
c. So as to show reduced net profit.
Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:_______.
Total machine-hours 30,000
Total fixed manufacturing overhead cost $252,000
Variable manufacturing overhead per machine-hour $ 2.10
Recently, Job T687 was completed with the following characteristics:________.
Number of units in the job 10
Total machine-hours 30
Direct materials $ 675
Direct labor cost $1,050
If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest:______
Answer:
Selling price= 240*1.4= $336
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (252,000/30,000) + 2.1
Predetermined manufacturing overhead rate= $10.5 per machine hour
Job T687:
Number of units in the job 10
Total machine-hours 30
Direct materials $ 675
Direct labor cost $1,050
Now, we need to allocate overhead and determine the total cost:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 10.5*30= $315
Total cost= 675 + 1,050 + 315= $2,040
Finally, the unitary cost and selling price:
Unitary cost= 2,040/10= $240
Selling price= 240*1.4= $336
Income statement under absorption costing and variable costing
[The following information applies to the questions displayed below.]
Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Manufacturing costs Direct materials per unit $ 60 Direct labor per unit $ 22 Variable overhead per unit $ 8 Fixed overhead for the year $ 528,000 Selling and administrative costs Variable selling and administrative cost per unit $ 11 Fixed selling and administrative cost per year $ 105,000
Assume the company uses absorption costing. Determine its product cost per unit.
Answer:
unitary product cost= $102
Explanation:
Giving the following information:
Manufacturing costs Direct materials per unit $60
Direct labor per unit $22
Variable overhead per unit $8
Fixed overhead for the year $528,000
Units produced= 44,000
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 fixed overhead:
Unitary fixed overhead= 528,000/44,000= $12
Now, the unitary product cost:
unitary product cost= 60 + 22 + 8 + 12
unitary product cost= $102
Single Plantwide Factory Overhead Rate The total factory overhead for Bardot Marine Company is budgeted for the year at $3,277,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboat and bass boat each require six direct labor hours for manufacture. Each product is budgeted for 11,500 units of production for the year. When required, round all per unit answers to the nearest cent. a. Determine the total number of budgeted direct labor hours for the year. direct labor hours b. Determine the single plantwide factory overhead rate. $ per dlh c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate. Speedboat $ per unit Bass boat $ per unit
Answer:
(A) 138,000 direct labor hours
(B) $23.75 per direct labor hour
(C) $142.5 per unit for speedboat and $142.5 per unit for bass boat
Explanation:
(A) The number of direct hours for The speedboats can be calculated as follows
= 11,500 × 6
= 69,000
The number of direct hours for the bass boat can be calculated as follows
= 11,500 × 6
= 69,000
Total number of budgeted direct labor hours for the year is
= 69,000 + 69,000
= 138,000 direct labor hours
(B) The single plantwide factory overhead can be calculated as follows
= Budgeted overhead cost/total number of budgeted labor hours
= 3,277,500/138,000
= $23.75 per direct labor hour
(C) The factory overhead allocated or unit of each product can be calculated as follows
For speedboats
= 69,000 × 23.75
= 1,638,750
1,638,750/11,500
= $142.5 per unit
For bass boats
=69,000 × 23.75
= 1,638,750
1,638,750/11,50
= $142.5 per unit
1. Assume a closed economy, perfectly elastic labor supply, and linear technol-ogy. Suppose the incremental capital-output ratio (ICOR) is 3, the depreciation rate is 3%, and the gross savings rate is 10%. Use the Harrod-Domar growth equation to determine the rate of growth. What would the gross savings rate have to be to achieve 5% growth? Assuming a perfectly elastic labor supply, state one criticism of this model from an exogenous growth theory viewpoint.
Answer:
Using the Harrod-Domar growth equation
Growth rate = Saving rate / Capital output ratio
Growth rate = 0.01 / 3
Growth rate = 0.003
Growth rate = 0.3%
Thus, the value of growth rate is 0.3%
When the incremental capital-output ratio is 3, to achieve the 5% growth rate, the gross saving rate is 0.24 or 24%
Exogenous growth: When the labor supply is perfectly elastic, then the exogenous does not allow any factor to substitute
Endogenous growth: When the labor supply is perfectly elastic, theem the exogenous does not lead to address the savings decision or sources of productivity growth.
Which of the following statements is CORRECT? a. If two firms differ only in their use of debt—i.e., they have identical assets, identical total invested capital, sales, operating costs, interest rates on their debt, and tax rates—but one firm has a higher total debt to total capital ratio, the firm that uses more debt will have a lower profit margin on sales and a lower return on assets. b. The total debt to total capital ratio as it is generally calculated makes an adjustment for the use of assets leased under operating leases, so the debt ratios of firms that lease different percentages of their assets are still comparable. c. A firm's use of debt will have no effect on its profit margin. d. If two firms differ only in their use of debt—i.e., they have identical assets, identical total invested capital, operating costs, and tax rates—but one firm has a higher total debt to total capital ratio, the firm that uses more debt will have a higher operating margin and return on assets. e. If one firm has a higher total debt to total capital ratio than another, we can be certain that the firm with the higher total debt to total capital ratio will have the lower TIE ratio, as that ratio depends entirely on the amount of debt a firm uses.
Answer: a. If two firms differ only in their use of debt—i.e., they have identical assets, identical total invested capital, sales, operating costs, interest rates on their debt, and tax rates—but one firm has a higher total debt to total capital ratio, the firm that uses more debt will have a lower profit margin on sales and a lower return on assets.
Explanation:
A firm that uses more debt financing will have to pay more interest. Interest is an expense that is deducted from Net Income so the more the debt, the higher the interest payment and the lower the net profit/ income.
Profit margin on sales is calculated by dividing profit by the sales revenue and return on assets is calculated by dividing net income by the average total assets. Both these ratios use the Net income as the numerator so if it is lower as a result of more interest payments, the ratio will be lower as well.
On September 12, Vander Company sold merchandise in the amount of $5,800 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the non-defective merchandise, which is restored to inventory. The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Vander must make on September 14 is (are):
Answer:
DR Sales returns and Allowances ............................. $500
CR Accounts Receivable........................................................$500
Explanation:
Jepson returned $500 worth of goods so this would need to be accounted for by reducing the Accounts receivable amount by $500.
The returns will be accounted for in the Sales returns and allowances account which will be debited to reflect this.
Consider the market for bagels, which is currently at equilibrium, and where Pbagel and Qbagel denote the price and quantity of bagels in the market, respectively. If the change given in each problem is the only change that happened (all other things are held constant), what will be the effect on the equilibrium price and quantity of bagels? Please draw a graph to explain.
A) The price of cream cheese, complementary goods to bagels, increases.
B) The price of croissants, substitute goods to bagels, decrease
C) The economy experiences an overall decrease in income (Suppose that bagel is an inferior good).
Answer:
please refer to attachment for more explanation
Explanation:
a. a. Since both goods are complementary goods an increase in the price of cream cheese would cause equilibrium price and quantity of bagel to decrease.
b. If the price of the substitute good croissant decreases then the demand for bagel will fall since croissant is obviously cheaper therefore demand curve will shift downward and price and quantity will fall.
c. Lower income of the consumer would make the demand for the inferior good bagel to rise. Demand curve will shift upwards and price and quantity will rise.
Eli Lilly is very excited because sales for his nursery and plant company are expected to double from $710,000 to $1,420,000 next year. Eli notes that net assets (Assets − Liabilities) will remain at 60 percent of sales. His firm will enjoy an 8 percent return on total sales. He will start the year with $310,000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy.
1. Does his optimistic outlook for his cash position appear to be correct?2. Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and subtract the asset buildup (equal to 50 percent of the sales increase) and add in profit.
Answer:
Since the profits are not enough to cover asset buildup, Eli will probably need to borrow money to cover them. Even though the company will be more profitable, its cash position will not be very healthy. ending cash balance = -$2,400Explanation:
current sales $710,000
net assets = equity = $710,000 x 60% = $426,000
return = $710,000 x 8% = $56,800
next year's sales $1,420,000
net assets = equity = $852,000
return = $1,420,000 x 8% = $113,600
asset buildup = $852,000 - $426,000 = $426,000
ending cash balance = beginning cash balance + profit - asset buildup = $310,000 + $113,600 - $426,000 = -$2,400
list down 10,10 real world examples of input and output markets.(Domestic and international)
Answer:
1) Example of an input market: you are an employee at CVS
input ⇒ labor (your work)
2) Example of an output market: you purchase medicines at CVS
output ⇒ goods (medicines)
3) Example of an input market: you deposit your savings at a bank
input ⇒ capital (savings)
4) Example of an output market: a company gets a loan from the bank
output ⇒ capital (loan)
5) Example of an input market: you have 2 houses and rent one of them
input ⇒ land (real estate)
6) Example of an output market: you rent a room at the university's dorm
output ⇒ land (room)
7) Example of an input market: a foreign company sells oil to the US
input ⇒ land (oil)
8) Example of an output market: an American company exports PVC products
output ⇒ goods (PVC products)
9) Example of an input market: you purchase bonds from Costco
input ⇒ capital (your money)
10) Example of an output market: Costco pays interest (coupons) to its bondholders
output ⇒ capital (interests)
Explanation:
Input factors are the resources used to produce goods and services.
Output factors are the goods or services that are produced using input factors.
Organizational commitment can be defined as _____. the collection of feelings and beliefs that managers have about their organization as a whole the process by which individuals internalize the values and expectations of an organization the training received by newcomers which teaches them the norms of the organization the collection of terminal and instrumental values that are held by an organization the rites of passage that determine how individuals enter, advance within, and leave organizations
Answer:
the collection of feelings and beliefs that managers have about their organization as a whole.
Explanation:
Organizational commitment can be defined as the collection of feelings and beliefs that managers have about their organization as a whole.
Generally, when the employees working in an organization completely identifies and believe in the vision, mission, values and ethical standards of their organization, it simply means that they believe and are in agreement with what the organization is doing and would basically have a high level of loyalty because they are proud to be associated with what the organization stands for.
Hence, organizational commitment is important for the growth and development of an organization.
Sunland Corporation had net sales of $2,427,500 and interest revenue of $40,000 during 2020. Expenses for 2020 were cost of goods sold $1,465,500, administrative expenses $220,600, selling expenses $289,300, and interest expense $47,900. Sunland’s tax rate is 30%. The corporation had 103,100 shares of common stock authorized and 71,990 shares issued and outstanding during 2020. Prepare a condensed multiple-step income statement for Sunland Corporation. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Answer and Explanation:
The preparation of the condensed multiple-step income statement is presented below:
Net sales $2,427,500
Less: Cost of goods sold -$1,465,500
Gross profit $962,000
Less:
Selling expenses $289,300
Administrative expenses $220,600 ($509,900)
Income from operations $452,100
Other revenue and gains
Interest revenue $40,000
Other expenses and losses
Interest expense $47,900 ($7,900)
Income before income tax $444,200
Income tax expense(30%) ($133,260)
Net income $310,940
Earnings per share($310,960 ÷ 71,990 shares) $4.32
Which management tool helps managers evaluate their contributions to the organization's goals, vision, and mission?
Balanced scorecard
Strategic constituencies
Internal process
Systems resources
Answer:
B (strategic constutencies)
Explanation:
On July 1, 2017, Ling Co. pays $15,360 to Sunland Company for a 2-year insurance contract. Both companies have fiscal years ending December 31. For Sunland Company, enter the July 1 transaction and the December 31 adjustment in the tabular summary that follows. (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Answer:
The payment to Sunland will increase the cash account of Sunland by $15,360.
It will also increase the liability account of Unearned Service revenue because Sunland has been paid for a service hat they have not rendered yet.
In December, they would have earned part of that money as 6 months would have elapsed.
Assuming the insurance is per month, for 2017, the revenue earned would be;
= 15,360 * 6/24 months
= $3,840
This amount will be sent to revenue on Dec. 31 and debited from the Unearned service revenue account to reduce that liability.
Davis Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.
Production volume 1,000 units 2,000 units
Direct materials $ 44,200 $ 88,400
Direct labor $ 37,300 $ 74,600
Manufacturing overhead $ 48,500 $ 62,200
The best estimate of the total monthly fixed manufacturing cost is:_________
a. $177,600
b. $225,200
c. $130,000
d. $34,800
Answer: $34800
Explanation:
Fixed cost is simply calculated as:
Total cost - Variable cost.
We need to find the total monthly variable manufacturing cost. To get this we'll calculate the variable cost per unit first. This can be calculated as:
= ($62200 − $48500)/(2000 units − 1000 units)
= $13700/1000 units
Variable cost per unit = $13.70 per unit
Variable cost = $13.70 × 1000
= $13,700
Fixed cost = Total cost - Variable cost.
Fixed cost = $48500 - $13700
Fixed cost = $34,800
The best estimate of the total monthly fixed manufacturing cost is $34800
Cady Construction received a contract to construct a hospital for $2,500,000. Construction began in 2019 and ended in 2020. Cost and other data are presented below: 2019 2020Costs incurred during the year $1,500,000 $1,300,000Estimated costs to complete 1,200,000 0Billings during the year 1,200,000 1,300,000Cash collections during the year 1,000,000 1,500,000 What is gross profit recognized during 2020 if Cady recognizes revenue over time according to percentage of completion?
Answer:
Gross profit recognized in 2020 = ($100,000)
Explanation:
Gross profit recognized = (Cost to date / Total estimated costs * Expected profit) - Previously recognized profit
Gross profit recognized in 2019 = $2,500,000 - ($1,500,000 + $1,200,000)
Gross profit recognized in 2019 = $2,500,000 - $2,700,000
Gross profit recognized in 2019 = $(200,000)
Gross profit recognized in 2020 = [$2,500,000 - ($1,500,000 + $1,300,000)] - $(-200,000)
Gross profit recognized in 2020 = $2,500,000 - $2,800,000 - (-$200,000)
Gross profit recognized in 2020 = $2,500,000 - $2,800,000 + $200,000
Gross profit recognized in 2020 = -$100,000
You are a co-founder of a start-up firm making electronic sensors. After a year of sales, your business is not growing rapidly, but you have some steady customers keeping the business afloat. A major supplier has informed you it can no longer supply your firm because it is moving to serve large customers only, and your volume does not qualify. Though you have no current orders to support it increased commitment to this supplier, you do have a new version of your sensor coming out that you help will increase the purchase volume by over 75% and qualify you for continuing supply. This supplier is important to your business. What do you do
Answer is given below :
Explanation:
To persuade the supplier to stay in touch with the company and continue to supply it, we can do the following as
Tell the supplier that sales have increased with the new product that the company is going to market, using different estimation methods. Demonstrate product samples to the supplier to gain their trust. Provide the supplier with some favourable terms and conditions so that it stays with the company. Make a formal agreement with him, we will order the bulk goods from the supplierOn April 1, Tamarisk, Inc. began operations. The following transactions were completed during the month.
1. Issued common stock for $21,600 cash.
2. Obtained a bank loan for $6,300 by issuing a note payable.
3. Paid $9,900 cash to buy equipment.
4. Paid $1,100 cash for April office rent.
5. Paid $1,300 for supplies.
6. Purchased $540 of advertising in the Daily Herald, on account.
7. Performed services for $16,200: cash of $1,800 was received from customers, and the balance of $14,400 was billed to customers on account.
8. Paid $360 dividend to stockholders.
9. Paid the utility bill for the month, $1,800.
10. Paid Daily Herald the amount due in transaction (6).
11. Paid $40 of interest on the bank loan obtained in transaction (2).
12. Paid employees’ salaries, $5,760.
13. Received $10,800 cash from customers billed in transaction (7).
14. Paid income tax, $1,350.
Journalize the transactions. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles and Explanation Debit Credit
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Answer:
Given below
Explanation:
Tamarisk, Inc.
Genral Journal
No. Account Titles and Explanation Debit Credit
1. Cash $21,600 Dr
Common Stock $21,600 Cr
Issued common stock for $21,600 cash. Cash is received and stock is issued.
2. Cash $6,300 Dr
Note payable $6,300 Cr
Obtained a bank loan for $6,300 by issuing a note payable. Cash is received and the liability is also increased.
3. Equipment $9,900 Dr
Cash $9,900 Cr
Equipment is bought by paying cash.
4. Office rent $1,100 Dr
Cash $1,100 Cr
Office rent is paid through cash.
5. Supplies $1,300 Dr
Cash $1,300 Cr
Supplies are bought for $1,300 cash.
6. Advertising Expense $540 Dr
Accounts Payable Daily Herald $540 Cr
Advertising is purchased on accounts of Daily Herald for $540
7. Cash $1,800 Dr
Accounts Receivable $14,400 Dr
Revenue $16,200 Cr
Performed services for $16,200, cash of $1,800 is received from customers, and the balance of $14,400 is billed to customers on account.
8. Dividends $360 Dr
Cash $360 Cr
Paid $360 dividend to stockholders.
9. Utilities $1,800 Dr
Cash $1,800 Cr
Utility bill is paid for the month, $1,800.
10. Accounts Payable Daily Herald $540 Dr
Cash $540 Cr
Advertising bought on accounts is paid in cash $ 540.
11. Interest Expense $40 Dr
Cash $40 Cr
Paid $40 of interest on the bank for the loan of $6,300 obtained from the bank.
12. Salaries $5,760 Dr
Cash $5,760 Cr
Salaries for $5,760 are paid in cash.
13. Cash $14,400 Dr
Accounts Receivable $14,400 Cr
Cash is received for the balance of $14,400 billed to customers on account for services performed.
14. Tax Expense $1,350 Dr
Cash $1,350 Cr
Cash $1,350 is paid as Tax.
he following information pertains to Adams Manufacturing Company for March Year 3. Assume actual overhead equaled applied overhead. March 1 Inventory balances Raw materials $ 123,900 Work in process 118,400 Finished goods 77,400 March 31 Inventory balances Raw materials $ 85,500 Work in process 145,200 Finished goods 80,900 During March Costs of raw materials purchased $ 118,900 Costs of direct labor 100,500 Costs of manufacturing overhead 62,800 Sales revenues 356,000 Required Prepare a schedule of cost of goods manufactured and sold. Calculate the amount of gross margin on the income statement.
Answer:
Instructions are below.
Explanation:
First, we need to calculate the cost of goods manufactured using the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 118,400 + (123,900 + 118,900 - 85,500) + 100,500 + 62,800 - 145,200
cost of goods manufactured= $293,800
Now, we can determine the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 77,400 + 293,800 - 80,900
COGS= $290,300
Finally, the gross margin:
Gross margin= sales - cogs
Gross margin= 356,000 - 290,300
Gross margin= $65,700
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,900 units) $ 293,700 $ 33.00 Variable expenses 178,000 20.00 Contribution margin 115,700 $ 13.00 Fixed expenses 55,700 Net operating income $ 60,000 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 7,900 units?
Answer:
$61,040$58,960$47,000Explanation:
units sold units sold units sold units sold
8,900 8,980 8,820 7,900
Total sales $293,700 $296,340 $291,060 $260,700
Variable costs ($178,000) ($179,600) ($176,400) ($158,000)
Contribution margin $115,700 $116,740 $114,660 $102,700
Period costs ($55,700) ($55,700) ($55,700) ($55,700)
Operating income $60,000 $61,040 $58,960 $47,000
1).If the Classical Music Society just breaks even, how many concerts does it hold? 2).In addition to the organization's artistic director, the Music Society would like to hire a marketing director for $39,000 per year. What is the breakeven point? The Music Society anticipates that the addition of a marketing director would allow the organization to increase the number of concerts to 54 per year. What is the Music Society's operating income/(loss) if it hires the new marketing director? 3).The Music Society expects to receive a grant that would provide the organization with an additional $13,000 toward the payment of the marketing director's salary. What is the breakeven point if the Music Society hires the marketing director and receives the grant?
Answer:
1) 30 concerts per year
2) If new marketing director is hired, the new break even point = 53 concerts per year.
If 54 concerts are made during the year, operating income = $1,800
3) 46 concerts per year
Explanation:
The first part of the question is missing:
"The lease payments on the concert hall are expected to be $4,000 per month. The organization pays its guest performers $1,800 per concert and anticipates corresponding ticket sales to be $4,500 per concert. The music society also incurs costs of approximately $1,000 per concert for marketing and advertising. The organization pays its artistic director $33,000 per year and expects to receive $30,000 in donations in addition to its ticket sales."
total fixed costs = salaries ($33,000) + rent ($4,000 x 112) = $81,000
net fixed costs = $81,000 - $30,000 (donations) = $51,000
contribution margin = ticket revenue - variable costs = $4,500 - ($1,800 + $1,000) = $4,500 - $2,800 = $1,700
break even point in units = $51,000 / $1,700 = 30 concerts per year
If new marketing director is hired, net fixed costs increase to $90,000:
new beak even point = $90,000 / $1,700 = 52.94 ≈ 53 concerts
if there are 54 concerts, operating income = (54 x $1,700) - $90,000 = $1,800
if the grant is received, then net fixed costs = $90,000 - $13,000 = $77,000
break even point = $77,000 / $1,700 = 45.29 ≈ 46 concerts
1 point
if the price decreases from Rs
10 to Rs 8 of a commodity but
the quantity demanded
remains the same , price
elasticity is *
one
O zero
O infinity
O none of these
Answer:
O zero
Explanation:
Elasticity of demand is defined as the rate of change of quantity of a good demanded with change in price.
Commodities with low elasticity change a little with change in price, while those with high elasticity have a large change with change in price.
The formula for price elasticity is
Elasticity of demand = (% change in quantity demanded) ÷ (% change in price)
Assume the demand is 10 units
Elasticity of demand = ({10 - 10} ÷ 10 * 100) ÷ ({8 - 10} ÷ 10 * 100)
Elasticity of demand = (0) ÷ (-20)
Elasticity of demand = 0
Answer:
PED = 0
Explanation:
The PED or price elasticity of demand is a measure to track and determine the responsiveness of quantity demanded to changes in price of the commodity. The PED is calculated using the following formula,
PED = % Change in Quantity demanded / % Change in Price
or
PED = [( Q1 - Q0 ) / Q0] / [( P1 - P0 ) / P0]
Lets assume that at price 10 the quantity demanded was also 10 and when price decreased to 8, the quantity demanded remained the same i.e. 10
So,
PED = [( 10 - 10 ) / 10] / [( 8 - 10 ) / 10]
PED = 0
Thus, the price elasticity of demand is zero.
easure of Damages. Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to inspect the sewage and water disposal system. GSI reported a split system with a watertight septic tank, a wastewater tank, a distribution box, and a leach field. The Testas bought the house. Later, Dean saw that the system was not as GSI described—there was no distribution box or leach field, and there was only one tank, which was not watertight. The Testas arranged for the installation of a new system and sold the house. Assuming that GSI is liable for breach of contract, what is the measure of damages?
Answer:
The Testas will probably be entitled to compensatory damages since they probably overpaid for the house. If they had known that the house did not have a proper sewage and water disposal system, they would have probably offered a lower price for the house or might have even decided not to buy it. The amount of the damages should be equal to the difference in the price of the house having a proper sewage and water disposal system vs. not having it.
Calculate the following: The future value of lump-sum investment of $3,200 in four years that earns 6 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.1 or the Garman/Forgue companion website.) Round Future value of a Single Amount in intermediate calculations to four decimal places. $ The future value of $1,100 saved each year for three years that earns 4 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $ A person who invests $1,800 each year finds one choice that is expected to pay 4 percent per year and another choice that may pay 7 percent. What is the difference in return if the investment is made for four years? Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $ The amount a person would need to deposit today with a 7 percent interest rate to have $4,000 in three years. Round your answer to the nearest dollar. (Hint: Use Appendix A.2 or the Garman/Forgue companion website.) Round Present value of a Single Amount in intermediate calculations to four decimal places. $
Answer:
(a) $4,040
(b) $3,434
(c) $348
(d) $3,265
Explanation:
(a) Calculate the following: The future value of lump-sum investment of $3,200 in four years that earns 6 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.1 or the Garman/Forgue companion website.) Round Future value of a Single Amount in intermediate calculations to four decimal places. $
To estimate this, the formula for calculating future value is used as follows:
FV = PV * (1 + r)^n ………………………….. (1)
Where,
FV = future value = ?
PV = lump-sum investment = $3,200
r = interest rate = 6%, or 0.06
n = number of years = 4
Substitute the values into equation (1) to have:
FV = $3,200 * (1 + 0.06)^4
FV = $3,200 * (1.06)^4
FV = $3,200 * 1.2625
FV = $4,040
(b) The future value of $1,100 saved each year for three years that earns 4 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $
To calculate this, the formula for calculating the Future Value (FV) of an Ordinary Annuity is used as follows:
FV = M * (((1 + r)^n - 1) / r) ................................. (2)
Where,
FV = Future value of the amount after 3 years =?
M = Annual savings = $1,100
r = interest rate = 4%, or 0.04
n = number of years = 3
Substituting the values into equation (2), we have:
FV = $1,100 * (((1 + 0.04)^3 - 1) / 0.04)
FV = $1,100 * 3.1216
FV = $3,434
(c) A person who invests $1,800 each year finds one choice that is expected to pay 4 percent per year and another choice that may pay 7 percent. What is the difference in return if the investment is made for four years? Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $
To do this, we first calculate the return of each of the 2 investments by using the the formula for calculating the Future Value (FV) of an Ordinary Annuity in part b above is used as follows:
Calculation of return at 4 percent
Where;
FV at 4% = Future value of the return after 4 years =?
M = Annual savings = $1,800
r = interest rate = 4%, or 0.04
n = number of years = 4
Substituting the values into equation (2), we have:
FV at 4% = $1,800 * (((1 + 0.04)^4 - 1) / 0.04)
FV at 4% = $1,800 * 4.2465
FV at 4% = $7,644
Calculation of return at 7 percent
Where;
FV at 7% = Future value of the return after 4 years =?
M = Annual savings = $1,800
r = interest rate = 7%, or 0.07
n = number of years = 4
Substituting the values into equation (2), we have:
FV at 7%= $1,800 * (((1 + 0.07)^4 - 1) / 0.07)
FV at 7% = $1,800 * 4.4399
FV at 7% = $7,992
Calculation of the difference in return
This is calculated as follows:
Difference = FV at 7% - FV at 4% = $7,992 - $7,644 = $348
(d) The amount a person would need to deposit today with a 7 percent interest rate to have $4,000 in three years. Round your answer to the nearest dollar. (Hint: Use Appendix A.2 or the Garman/Forgue companion website.) Round Present value of a Single Amount in intermediate calculations to four decimal places. $
To estimate this, the formula for calculating present value is used as follows:
PV = FV / (1 + r)^n ………………………….. (1)
Where;
PV = Present value or amount to deposit today = ?
FV = future value in three years = $4,000
r = interest rate = 7%, or 0.07
n = number of years = 3
Substitute the values into equation (1) to have:
PV = $4,000 / (1 + 0.07)^3
PV = $4,000 / 1.2250
PV = $3,265
g Suppose a worker with an annual discount rate of 8 percent currently resides in Chicago and is deciding whether to remain there or to move to Phoenix. There are three work periods left in the life cycle. If the worker remains in Chicago, he will earn $40,000 in each of the three periods. If the worker moves to Phoenix, he will earn $43,500 in each of the three periods. What is the highest cost of migration that a worker is willing to incur and still make the move
Answer: $9,741.43
Explanation:
The highest cost of migration that the worker is willing to incur is the one that will equate the present value of the salary in Phoenix to the salary in Chicago.
Chicago = 40,000 + 40,000/(1 + 8%) + 40,000/ (1 + 8%)^2
= $111,330.59
Phoenix = 43,500 + 43,500/(1 + 8%) + 43,500/ (1 + 8%)^2
= $121,072.02
Hoghest cost of migration = 121,072.02 - 111,330.59
= $9,741.43
If the Cost of migration exceeds $9,741.43, the worker should stay in Chicago.
Select the accounting principle, assumption, or related item that best completes the sentence. Ex: Material. Full disclosure. Far value. Relevance. Periodicity. Consistency. Revenue recognition. Comparabitlity. Confirmatary value.1. _________and ___________are the two fundamental qualities that make accounting information useful for decision making.2. Information that helps users confirm or correct prior expectations has __________.3. _________enables users to identify the real similarities and differences in economic events between companies.4.________ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.5. Information is __________if omitting it or misstating it could influence decisions that users make on the basis of the reported financial information.6. The _________characteristic requires that the same accounting method be used from one accounting period to the next, unless it becomes evident that an alternative method will bring about a better description of a firm's financial situation.7._______means that a company cannot select information to favor one set of interested parties over another.8. Providing information that is of sufficient importance to influence the judgement and decisions of an informed user is referred to as _________.9. Corporations must prepare accounting reports at least yearly due to the____________ assumption.10._____________occurs when the performance obligation is satisfied.
Answer:
1. Relevance and faithful 2.confirmatory value 3.Comparability 4. fair value 5. material 6. consistency 7. neutrality 8.Full disclosure 9. periodicity 10. Revenue recognition
In the future, electrical power may come from quantum nucleonics, a form of nuclear power that produces no residual radiation. The ability to use this form of power will require equipment adaptations, but it will solve the world’s need for clean and efficient power. Companies that replace inefficient sources of power with quantum nucleonics only after they are required to by the Environmental Protection Agency are operating at a(n) _____ responsibility level. Group of answer choices
Answer: legal
Explanation:
The Environmental Protection Agency (EPA) was established in so that both human and the environmental health can be protected.
Based on the information given in the question, the companies that replace inefficient sources of power with quantum nucleonics only after they are required to by the Environmental Protection Agency are operating at a legal responsibility level. It should be noted that the law will have to be obeyed by the business at this legal responsibility level.
Which one of the following is a possible sign of poor listening?
a
Never being asked to repeat information
b
Oral communication replaces most written communication
c
Never breaking the chain of command
d
Finding out about events from others or via memo rather than through normal channels.
Sunland Company uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2019 totaled $12000 of materials, $8000 of direct labor costs, and $5000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $9000, and the ending balance is $6000. During the year, the company completed 25 machines. How much is the cost per machine
Answer:
$1,120
Explanation:
The computation of the cost per machine is shown below:
Cost per machine is
= Total machine cost ÷ number of machines completed
where,
Total cost of machine is
= Opening work in process + direct material + direct labor + manufacturing overhead - ending work in process
= $9,000 + $12,000 + $8,000 + $5,000 - $6,000
= $28,000
And, the number of completed machines is 25
So, the cost per machine is
= $28,000 ÷ 25
= $1,120
4. Human judgment and experience can play a role in the advent of stock market crash because
O Investors with an experience of financial crises are better at diversifying their portfolios
Investors with an experience of financial crises are better at explolong profit opportunities
Investors with an experience of financial crises are better at staying out of the market in turbulent times.
A lot of people who have lived through financial crises have reported that as a consequence of these crises and
their narratives, their faiths in the market have diminished
Answer:
Investors with an experience of financial crises are better at diversifying their portfolios
Explanation:
When an investor has experienced a financial crisis in the past, and decides to diversify his investment portfolio as a result, he is using both human judgment and experience to take the best decisions available to him.
Diversifying your investment porftolio is a good decision because it reduces risk (although it may also reduce profitability so there is a trade-off). Investors with past experience tend to spread their investments in order to reduce risk and avoid large losses. They do this because they see the possibility of a new financial crisis in the near future.
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