Answer:
alls you have to do is ask the interne
Management at the Flagstaff Company currently sells its products for $250 per unit and is contemplating a 40% increase in the selling price for the next year. Variable costs are currently 30% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will still pay the same variable cost per unit). Fixed expenses are $120,000 per year. If fixed costs were to decrease 10% during the current year and the new selling price goes into effect, how many units will need to be sold to breakeven
Answer:
393 units will need to be sold to breakeven
Explanation:
Break even point is the point where a Company makes neither makes a profit nor a loss.
Step 1 : Calculate new variables
New Sales = $250 x 1.40 = $350
Variable Costs = $250 x 30 % = $75
New Fixed Costs = $120,000 x 90 % = $108,000
Step 2 : Break even (units)
Break even (units) = Fixed Costs ÷ Contribution per unit
= $108,000 ÷ ($350 - $75)
= 393 units
Thus, 393 units will need to be sold to breakeven
Ben and Jerry were currently both producing at point A on their production possibilities frontier and then Ben decided he would be willing to trade 4 pounds of cones to get 2 pounds of ice cream from Jerry. If both decided to specialize in what they had a comparative advantage in and trade, the gains from trade would be a. 1 pound of cones for Ben and 1 pound of ice cream for Jerry. b. 1 pound of ice cream for Ben and 1 pound of cones for Jerry. c. 2 pounds of ice cream for Ben and 2 pounds of cones for Jerry. d. 2 pounds of ice cream for Ben and 1 pound of cones for Jerry.
Answer:
b. 1 pound of ice cream for Ben and 1 pound of cones for Jerry.
Explanation:
Ben and Jerry both produce ice cream. They can have comparative advantage with producing the specialized product. Ben can gain from the trade if it produces more of ice cream and less or no cones. Jerry would gain the comparative advantage if it would produce cones for the ice cream. Both of them can have comparative advantage by selling the specialized products to each other.
High owns 60% of Low. In 2019, Low sold inventory (cost $70,000) to High for $100,000. 40% of this inventory was not sold to third parties by High until 2020. In 2020, Low sold inventory (cost $72,000) to High for $120,000. Of this inventory, $50,000 was not sold to third parties by High until 2021. In 2020, Low reports $70,000 of net income. What is the noncontrolling interest in 2020 income of Low. $24,800 $31,200 $37,200 $46,800
Answer: $24800
Explanation:
To calculate the noncontrolling interest in 2020 income of Low goes thus:
Profit reported by Low in 2020 = $70000
Add: Profit in opening stock that isn't sold to third party = ($100,000 × 40%) × 30% = $12,000
Less Profit in Opening stock that's not sold to third party = $50000 ×40% =$20000
The Total Profit will be:
= $70000 + $12000 - $20000
= $62000
Then, the noncontrolling interest in 2020 income of Low will be:
= $62000 × 40%
= $62000 × 0.4
= $24800
Senff Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pools Activity Rate Setting up batches $ 89.00 per batch Processing customer orders $ 79.41 per customer order Assembling products $ 14.11 per assembly hour Data concerning two products appear below: Product V91Z Product V21I Number of batches 70 13 Number of customer orders 21 10 Number of assembly hours 493 698 How much overhead cost would be assigned to Product V91Z using the activity-based costing system? (Round your intermediate calculations to 2 decimal places.)
Answer:
$14,853.84
Explanation:
Calculation to determine How much overhead cost would be assigned to Product V91Z using the activity-based costing system
Overhead cost assigned to Product V91Z
Assembly product $6,956.23
($14.11*493)
Processing customer order $1,667.61
($79.41*21)
Setting up batches $6,230
($89*70)
Total $14,853.84
Therefore How much overhead cost would be assigned to Product V91Z using the activity-based costing system will be $14,853.84
Declining Balance Depreciation Irons Delivery Inc. purchased a new delivery truck for $40,600 on January 1, 2019. The truck is expected to have a $2,000 residual value at the end of its 5-year useful life. Irons uses the double-declining-balance method of depreciation. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020.
Answer:
A. Depreciation expense $16240
Cr Accumulated depreciation $16240
B. Dr Depreciation expense $9744
Cr Accumulated depreciation $9744
Explanation:
A. Preparation of the journal entry to record depreciation expense for 2019 and 2020.
Dr Depreciation expense $16240
Cr Accumulated depreciation $16240
(Record double-declining-balance depreciation expense)
Depreciation expense for 2019= $40,600 × (1/5 × 2)
Depreciation expense for 2019= $16240
B. Preparation of the journal entry to record depreciation expense for 2020
Dr Depreciation expense $9744
Cr Accumulated depreciation $9744
[($40,600 –$16,240) × (1/5 × 2) = 9744]
(Record double-declining-balance depreciation expense)Depreciation expense for 2020
You manage an equity fund with an expected risk premium of 10% and an expected standard deviation of 15%. The rate on Treasury bills (risk-free rate) is 5%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. The expected return and standard deviation of your client's overall portfolio is:__________ a. 11.0% and 9.0% b. 10.0% and 8.4% c. 15.0% and 9.0% d. 5.0% and 15.0%
Answer:
Portfolio Mean return = 11%
Portfolio Stdev = 0.09 or 9%
Option a is the correct answer
Explanation:
The mean return of a portfolio consisting of two securities can be calculated by multiplying the weight of each security in the portfolio by the mean return of that security and adding the products for each security. The formula for two asset or security portfolio return (mean) can be written as follows,
Portfolio Mean = wA * rA + wB * rB
Where,
w represents the weight of each security r represents the mean return of each security
The return on the equity fund = risk free rate + risk premium
The return on the equity fund = 5% + 10% = 15%
Portfolio Mean return = 60% * 15% + 40% * 5%
Portfolio Mean return = 11%
The standard deviation is a measure of the total risk. The standard deviation of a portfolio consisting of two securities, one of which is a risk free security and has zero standard deviation, can be calculated as follows,
Portfolio Stdev = Weight of risky security * Standard deviation of risky security
Portfolio Stdev = 0.6 * 0.15
Portfolio Stdev = 0.09 or 9%
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $150,000. Variable processing costs are estimated to be $7 per book. The publisher plans to sell single-user access to the book for $49. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand
Question Completion:
What profit can be anticipated with a demand of 3,400 copies?
With a demand of 3,400 copies, what is the access price per copy that the publisher must charge to break even?
Answer:
Eastman Publishing Company
a) A loss of $7,200 can be anticipated with a demand of 3,400.
b) The access price per copy with a demand of 3,400 copies should be $51.
Explanation:
a) Data and Calculations:
Fixed cost = $150,000
Variable costs per book = $7
Selling price of single-user access per book = $49
Demand = 3,400 copies
Profit based on a demand of 3,400 copies:
Income Statement:
Sales Revenue ($49 *3,400) $166,600
Variable costs ($7 * 3,400) 23,400
Contribution margin $142,800
Fixed cost 150,000
Net loss $7,200
To break-even, the total sales revenue should be equal to the total costs. Therefore, the access price should be:
Total costs:
Fixed cost $150,000
Variable 23,400
Total costs $173,400
Sales unit 3,400
Access price = $51.00 ($173,400/3,400)
A mining company is evaluating when to open a gold mine. The mine has 100,000 ounces of gold left that can be mined and mining operations will produce 10,000 ounces per year. The price of gold from the mine will be guaranteed for the remaining life of the mine through the gold futures contracts. If the mine is opened today, each ounce of gold will generate an after-tax cash flow (= total or net cash flow) of $1,300 per ounce. If the company waits one year, there is a 70 percent probability that the contract price will generate an after-tax cash flow of $1,550 per ounce and a 30 percent probability that the after-tax cash flow will be $1,200 per ounce. The required return on the gold mine is 15 percent and it will cost $30,000,000 to open the mine regardless of whether the mine is open today or in one year. Compute the value of the option to wait today.
Answer:
The value of the option to wait today = $2,500,000
Explanation:
a) Data and Calculations:
Quantity of gold left in the mine = 100,000 ounces
Quantity of gold to be produced yearly = 10,000 ounces
Estimated life of mine = 10 years (100,000/10,000)
After-tax cash flow if mine is opened today = $1,300 per ounce
After-tax cash flow if mine is opened a year later:
Expected value = ($1,550 * 70%) + ($1,200 * 30%) = $1,325 per ounce
Comparison of the values of opening options:
Mine opened Mine opened
today a year later
After-tax cash flow per ounce $1,300 $1,325
Quantity of gold in the mine 100,000 100,000
Total after-tax cash flows $130,000,000 $132,500,000
Cost of opening mine 30,000,000 30,000,000
Required return (15%) 4,500,000 4,500,000
Actual returns from mine $100,000,000 $102,500,000
Therefore, the value of option to wait:
Returns from mine opened next year = $102,500,000
Returns from mine opened today = 100,000,000
Value of the option to wait today = $2,500,000
Ataxia Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 10 years with no salvage value at the end of the 10 years. Ataxia's internal rate of return on this equipment is 8%. Ataxia's discount rate is also 8%. The payback period on this equipment is closest to (Ignore income taxes.):
Answer:
6.71 years
Explanation:
we need to determine the PVIFA for 8% and 10 periods:
PVIFA = [1 - 1/(1 + i)n ] / i
PVIFA = [1 - 1/(1 + 0.08)¹⁰ ] / 0.08 = 0.5368 / 0.08 = 6.71
Ataxia's payback period should be 6.71 years or less in order for this project to be feasible and accepted.
Corporation produces a single product. The standard cost card for the product follows:
Direct materials (4 yards $5 per yard) $20
Direct labor (1.5 hours $10 per hour) $15
Variable manufacturing overhead (1.5 hrs $4 per hour) $6
During the year, the company produced 8,840 units of product and incurred the following actual results:
Materials purchased, 56,100 yards at $2.10 per yard $117,810
Materials used in production (in yards) 36,450
Direct labor cost incurred, 18,000 hours at $8.20 per hour $147,600
Variable manufacturing overhead cost incurred $57,400
Fixed manufacturing overhead cost incurred $117,000
Ignore the variable manufacturing overhead data.
1. The materials price variance far the period is:_____.
A. $1,250 F.
B. $1,500 F.
C. $1,250 U.
D. $1,500 U.
2. The materials quantity variance for the period is:_____.
A. $950 U.
B. $5,000 F.
C. $1,000 U.
D. $6,000 F.
3. The labor rate variance for the period is:_____.
A. $3,150 U.
B. $2,700 F.
C. $2,700 U.
D. $3,150 F.
4. The labor efficiency variance for the period is:_____.
A. $3,000 U.
B. $2,550 U.
C. $2,550 F.
D. $3,000 F.
Answer:
Results are below.
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (5 - 2.1)*56,100
Direct material price variance= $169,690 favorabe
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (8,840*4 - 36,450)*5
Direct material quantity variance= $5,450 unfavorable
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (1.5*8,840 - 18,000)*10
Direct labor time (efficiency) variance= $47,400 unfavorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (10 - 8.2)*18,000
Direct labor rate variance= $32,400 favorable
Which resources would be classified as a land factor of production?
A)
milk
B)
petroleum
C)
timber
D)
tractor
E)
workers
Timber and Petroleum can be classified as a land factor of production
Land is part of the four factors of production. The other three factors are Capital, Labour and Entrepreneur.
Let understand clearly that Land refers to anything that comes from the land and serves as resources used to produce goods and services.Capital is the factor that provides the money needed to run the business operation. The reward is Interest.Labour is the factor that helps the business run its day to day operation and this includes workers, staff etc. The reward for labor is Wages and salary.Entrepreneur is the factor that control and manage the other three factor of production. The reward for entrepreneur is Profit.
In conclusion, Petroleum and Timber are part of land and they serves as resources used to provide refined fuel, furniture and so on.
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Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning) $18,000 $44,000 Inventory (ending) 12,000 54,000 Purchases 174,000 181,600 Purchase returns 9,000 54,000 Required:1. Calculate cost of goods sold for each company.2. Calculate the inventory turnover ratio for each company.3. Calculate the average days in inventory for each company.
4. Explain which company appears to be managing its inventory more efficiently.
Answer:
Lewis Incorporated and Clark Enterprises
Lewis Clark
1. Cost of goods sold $171,000 $117,600
2. Inventory turnover ratio 11.4 2.4
3. Average days in inventory 32 152
4. Given the ratios and the figures, Lewis Incorporated is managing its inventory more efficiently than Clark Enterprises.
Explanation:
a) Data and Calculations:
Lewis Clark
Inventory (beginning) $18,000 $44,000
Purchases 174,000 181,600
Purchase returns (9,000) (54,000)
Inventory (ending) (12,000) (54,000)
Cost of goods sold $171,000 $117,600
Inventory (beginning) $18,000 $44,000
Inventory (ending) 12,000 54,000
Total inventory $30,000 $98,000
Average inventory $15,000 $49,000
Inventory turnover ratio = Cost of goods sold/Average Inventory
Cost of goods sold $171,000 $117,600
Average inventory $15,000 $49,000
Inventory turnover
ratio 11.4 2.4
Average days in inventory = 365/Inventory turnover ratio
= 32 152
If GDP is confidently expected to grow at a rapid 4% rate this year, how do you predict investment spending will change? Is it likely to grow faster than, slower than, or at the same rate as GDP? Why? Based on this expectation, investment spending is likely to by 4%. A rapidly growing economy will generally make business people optimistic, expectations about potential future profits. As a result, they are eager to invest.
Answer:
Based on this expectation, investment spending is likely to increase by more than 4%.
A rapidly growing economy will generally make business people more optimistic, with higher expectations about potential future profits. As a result, they are more eager to invest.
Investment will increase higher than 4% because in a growing economy like this, people will be so optimistic that they would invest huge sums to capitalize on the growth and earn some returns.
This rate of increase would be greater than GDP because GDP is based on multiple factors including investment therefore those factors like government spending would have to increase as well.
If the GDP is expected to be increased by 4%, the investment spending are likely to be increased by more than 4%.
In the rapid growing economy the investors are generally more optimistic they have higher expectations about the future potential profit as a result they will be more eager to invest.
What is GDP?GDP or gross domestic product final value of goods and services produced which is the economy during a financial year. The GDP excludes the value of intermediate consumption to avoid the problem of double counting.
An increasing GDP positively effect the investment spending as the people in the economy are optimistic about the future profit and hence will be eager to invest huge sums to make bigger profits.
Therefore rate of increase in investment spending will we more than 4% when the rate of GDP increases by 4%.
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Now the restaurant owner receives some good news and some bad news. The good news is that his landlord has rescinded the rent increase. The bad news is that the price of salmon at the fish market has risen. This is a blow because his restaurant is called SALMON CITY because almost all of the items use salmon. The increase in the price of salmon: Hint: Think in terms of the relation between revenue and cost at the margin -- and its implications for firm behavior.a. will cause him to raise his price and reduce the number of meals that he servesb. will cause him to lower his price in order to raise revenuec. may cause the price he charges to rise or falld. will have no impact on the price that he charges or the number of customers that he serves
Answer: a. will cause him to raise his price and reduce the number of meals that he serves
Explanation:
The owner makes a lot of meals that rely on salmon. With salmon prices going up, he will have to pay more money to buy the salmon that he uses to prepare the meals.
This would reduce his profit margin. He will therefore have to increase the price at which he sells his meals so as to recuperate the increased costs. He will also reduce the number of meals he serves because he will have to buy less salmon so that he does not incur a larger cost.
Aster Inc. has developed a new digital three-tier food steamer. Though the product comes with a self-explanatory manual, the controls and the operation of the appliance have to be explained to the customer on a one-to-one basis, in great detail. Which of the following elements of the promotional mix is Aster most likely to rely on to sell its products?
a. Advertising
b. Sales promotion
c. Public relations
d. Personal selling
Answer:
d. Personal selling
Explanation:
Personal selling would be the one of the component of the promotional mix where the person interact with the customers from face to face and explains the product with respect to its features, price, benefits, etc also at the same time customer could solve their doubts related to the product
So as per the given situation, the option d is correct
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $130. Limit Buy Orders Limit Sell OrdersPriceShares PriceShares$129.75400 $129.80150129.70700 129.85150129.65400 129.90300129.60200 129.95150128.65500 a. If a market buy order for 150 shares comes in, at what price will it be filled
Answer:
a. If a market buy order for 150 shares comes in, it will be filled at
= $128.65500 per share ($19,298.25 in total).
Explanation:
a) Data and Calculations:
Limit Buy Orders Limit Sell Orders
Price Shares $129.75400 $129.80150
Price Shares 129.70700 129.85150
Price Shares 129.65400 129.90300
Price Shares 129.60200 129.95150
Price Shares 128.65500 130.00000
The total purchase price for 150 shares = $19,298.25 ($128.65500 * 150)
b) An investor's Limit Buy Orders give the limit above which the shares cannot be exchanged for cash. But below and at the limit amount, the shares can be bought in exchange for cash. The investor's Limit Sell Orders give the limit below which the shares should not be sold in exchange for cash. In other words, the shares can be sold at a price above the limit.
Multi-Level-Marketing is a quickly growing industry in the United States. Many men and women are deciding to work from home, selling various goods to their friends and family due to the convenience and possible salary that can be made. Multi-Level-Marketing consists of a hierarchy of workers and customers and is sometimes referred to as a pyramid scheme
Answer:
True
Explanation:
Multilevel marketing is a strategy that consists of creating a hierarchy of workers for product distribution, being very common companies of beauty products, essential oils, and other products that are easy to sell. The strategy works like this: the distributors buy the products of the companies to sell to the final customer, and thus they receive a percentage for the sale of the products. But there is a criticism about this strategy, which can be a pyramid scheme, when there is a greater intention of the company to recruit new distributors than to actually sell its products, because in a pyramid scheme the intention is always to profit to benefit those who are on the top. Generally, companies that operate in an illegal pyramid scheme have strong marketing aimed at recruiting people to purchase products for sale with promises of quick enrichment.
Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 5.0% rate of inflation in the future. The real risk-free rate is 1.5%, and the market risk premium is 5.0%. Mudd has a beta of 1.5, and its realized rate of return has averaged 13.5% over the past 5 years. Round your answer to two decimal places.
Answer:
r of Mudd = 14.00%
Explanation:
The required rate of return for Mudd Enterprises can be calculated using the CAPM equation. The equation is as follows,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the market risk premiumWe know the beta for Mudd and we also know the market risk premium. We will need to calculate the risk free rate.
Risk free rate = Real risk free rate + expected inflation rate
Risk free rate = 1.5% + 5%
Risk free rate = 6.5%
r of Mudd = 6.5% + 1.5 * 5%
r of Mudd = 14.00%
The Fabricating Department started the current month with a beginning Work in Process inventory of $11,600. During the month, it was assigned the following costs: direct materials, $77,600; direct labor, $25,600; and factory overhead, 80% of direct labor cost. Also, inventory with a cost of $117,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:
Answer: $18,280
Explanation:
Ending inventory for fabricating department = Beginning Work in Process + Direct materials + Direct labor + Factory overhead - Inventory transferred out of department
= 11,600 + 77,600 + 25,600 + (80% * 25,600) - 117,000
= 11,600 + 77,600 + 25,600 + 20,480 - 117,000
= $18,280
1. Which one of the items below is NOT a reason why CASH does not equal PROFIT?
A. Credit Sales
B. Credit Purchases
C. Cash Sales
D. Prepayments
Answer:
I have no more ad!!!!
Explanation:
One of the items that is below which is not a reason why cash does not equal profit is credit sales. The correct option is a.
What is credit sales?Credit sales refer to a sale in which the amount owed will be paid at a later date. In other words, credit sales are purchases made by customers who do not render payment in full, in cash, at the time of purchase.
There are three main types of sales transactions: cash sales, credit sales, and advance payment sales. The difference between these sales transactions simply lies in the timing of when cash is received. 1. Cash sales: Cash is collected when the sale is made and the goods or services are delivered to the customer. 2. Credit sales: Customers are given a period of time after the sale is made to pay the seller.
3. Advance payment sales: Customers pay the seller in advance before the sale is made.
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Apedwa Inc. recently purchased a new delivery truck. The new truck costs $25,000 and is expected to generate net after-tax operating cash flows, including depreciation, of $7,000 at the end of each year. The truck has a 5-year expected life. The expected abandonment values (salvage values after tax adjustments) at different points in time are given below. The firm's cost of capital is 10 percent. What is ithis project's optimal economic life?
Year Annual Operating Cash Flow Salvage Value
0 ($20,000) $20,000
1 7,000 16,000
2 7,000 14,000
3 7,000 12,000
4 7,000 8,000
5 7,000 0
Answer:
This project's optimal economic life is 3 years.
Explanation:
Note: See the attached excel file for the calculation of equivalent annual cost
In the attached excel file, the following is used:
Cost of Capital = 10%
From the attached excel file, the highest equivalent annual cost of $526 occurred in year 3. This implies that this project's optimal economic life is 3 years.
g In the Shaping Department of Crane Company the unit materials cost is $2.00 and the unit conversion cost is $1.50. The department transferred out 7000 units and had 1500 units in ending work in process 20% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is $1050. $5250. $3000. $3450.
Answer:
$3,450
Explanation:
Step 1 : Equivalent units of production in work in process
Materials = 1,500 x 100 % = 1,500
Conversion Costs = 1,500 x 20 % = 300
Step 2 : Cost to be assigned to the ending work in process
Materials (1,500 x $2.00) $3,000
Conversion (300 x $1.50) $450
Total $3,450
Conclusion
the total cost to be assigned to the ending work in process is $3,450.
Assume that a $1,000,000 par value, semiannual coupon US Treasury note with four years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $746,617.36 $634,624.76 $470,368.94 $895,940.83
Answer:
Asset Price= $746,617.36
Explanation:
Giving the following information:
Face value= $1,000,000
Coupon= 0.03/2= 0.015*1,000,000= $15,000
Number of periods= 2*4= 8 semesters
YTM= 0.11/2= 0.055
To calculate the price of the asset, we need to use the following formula:
Asset Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Asset Price= 15,000*{[1 - (1.055^-8) / 0.055} + [1,000,000 / (1.055^8)]
Asset Price= 95,018.49 + 651,598.87
Asset Price= $746,617.36
a disgruntled customer will tell how many people about their experience
Answer:
A disgruntled customer will tell 9 - 15 people about their experience.
Explanation:
According to a study carried out by the White House Office of Consumer Affairs, a dissatisfied consumer tells 9-15 people about their experience. However, with the advent of social media and the internet, this number can sky-rocket into thousands and possibly millions depending on how viral the complaint becomes.
This is the more reason why organizations should endeavor to provide good customer service so that their brand will not be dragged into the mud by disgruntled customers.
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,270 $ 1,750 $ 1,190 Variable cost per unit $ 850 $ 1,200 $ 850 Upholstery labor-hours per unit 7 hours 10 hours 4 hoursRequired:
1. Portsmouth is considering paying its upholstery laborers additional compensation to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime premium per hour should the company be willing to pay to keep the upholstery shop open after normal working hours?
2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $44 per hour. The management of Portsmouth is confident that this upholstering company’s work is high quality and their craftsmen can work as quickly as Portsmouth’s own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it provides the raw materials to the nearby company and then hires it to upholster the Love Seats?
3. Should Portsmouth hire the nearby upholstering company?
Answer:
1. $55 per hour
2. $41 per hour
3.Yes
Explanation:
1. Calculation to determine how much of an overtime premium per hour should the company be willing to pay.
Selling price per unit $ 1,750
Less Variable cost per unit ($1,200)
Contribution margin per unit (a) $ 550
Upholstery shop time required to produce one unit (b) 10 hours
Contribution margin per unit of the constrained resource (a) ÷ (b) $55 per hour
($550/10 hours)
Therefore the Maximum overtime premium per hour will be $55 per hour
2. Calculation to determine How much additional contribution margin per hour can Portsmouth earn
First step is to calculate the Contribution margin per unit of the constrained resource
Selling price per unit $ 1,190
Less Variable cost per unit ($850)
Contribution margin per unit (a) $ 340
Upholstery shop time required to produce one unit (b) 4hours
Contribution margin per unit of the constrained resource (a) ÷ (b) $85 per hour
($340/4 hours )
Now let calculate The additional contribution margin per hour earned by hiring the nearby company
Additional contribution margin per hour earned= $85 – $44
Additional contribution margin per hour earned= $41 per hour
Therefore The additional contribution margin per hour earned by hiring the nearby company will be $41 per hour
3. Yes . Portsmouth should hire the nearby upholstering company reason been that Portsmouth will earn an additional contribution margin of $41 per hour by hiring the nearby company
When we grow in relationship with ______________, we grow in relationship with God.
Answer:
Explanation:
knowledge? Sorry if this dosent help! <3
Corporation Q, a calendar year taxpayer, has incurred the following Section 1231 net gains and losses since its formation in 2016: 2016 2017 2018 Section 1231 gains $ 14,800 $ 5,700 0 Section 1231 losses (13,000 ) (9,000 ) $ (3,100 ) Net gain or (loss) $ 1,800 $ (3,300 ) $ (3,100 ) Required: In 2019, Corporation Q sold only one asset and recognized a $4,000 Section 1231 gain. How much of this gain is treated as capital gain, and how much is ordinary
Answer: $4,000 is ordinary income. No Capital gain
Explanation:
In 2017 and 2018, total Section 1231 losses are:
= 3,300 + 3,100
= $6,400
The Section 1231 gain in 2019 falls below the combined losses from the previous years of 2017 and 2018 so will not be counted as a capital gain as those losses are not yet being recaptured.
The entire $4,000 is therefore ordinary income.
Marketers competing on product attributes and image are said to be participating in:
Answer:
nonprice competition
Explanation:
Marketers battling on product characteristics and image is defined as Non-price competition.
What is Non-price competition?Non-price competition is a strategy that implies attracting customers and increasing sales by providing superior product quality, a unique selling proposition, a great location, and excellent service rather than lower prices. It helps brands stand out and win new consumers
It is a type of competitiveness wherein the two or more manufacturers exploit elements such as marketing, transportation, or customer support to raise demand for their products rather than price.
Therefore, it can be concluded that Non-price competition is characterized as manufacturers competing on product qualities and appearance.
Learn more about Non-price competition here:
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The following account balances were taken from the adjusted trial balance for Capstone Messenger Service, a delivery service firm, for the fiscal year ended April 30, 20Y7: Depreciation Expense $9,800 Fees Earned 520,400 Insurance Expense 1,860 Miscellaneous Expense 3,920 Rent Expense 74,500 Salaries Expense 261,700 Supplies Expense 3,330 Utilities Expense 28,400 Prepare an income statement.
Answer and Explanation:
The preparation of the income statement is presented below:
Revenues
Fees earned $520,400
Total revenues $520,400
Less expenses:
Depreciation Expense $9,800
Insurance Expense $1,860
Miscellaneous Expense $3,920
Rent Expense $74,500
Salaries Expense $261,700
Supplies Expense $3,330
Utilities Expense $28,400
Total expenses $383,510
Net income $136,890
In the extended Labor CAPM, the CAPM measure of systematic risk, beta, is replaced by an adjusted beta that also accounts for covariance with the portfolio of aggregate human capital. Despite the complications inherent in any extension of the CAPM with a labor component, labor is an important consideration in explaining the systematic risk of financial securities.
a. True
b. False
Answer:
Despite the complications inherent in any extension of the CAPM with a labor component, labor is an important consideration in explaining the systematic risk of financial securities.
b. False
Explanation:
Instead of being an important component of the systematic risk, labor is a component of the unsystematic risk of a financial security or investment. Therefore, the risk arising from the labor component is a type of unsystematic risk. Unsystematic risks are peculiar to a firm or an industry. They are internal to the business environment of a firm or an industry. Systematic risks are market-driven risks. These latter risks include market, interest rate, and purchasing power (inflation) risks.