Answer: 20%
Explanation:
The annual interest rate that John earned in this investment will be calculated thus:
At the annual interest rate, the money that's invested will be equal to the money that's earned. Therefore,
10000 = 2000/[1+20%]¹ + 29860/[1+20%]^7
10000 = 2000/(1+0.2)¹ + 29860/(1+0.2)^7
10000 = 1666.67 + 8333.33
10000 = 10000
Therefore, the annual interest rate John earned in this investment is 20%.
Last year Christine worked as a consultant. She hired an administrative assistant for $15,000 per year and rented office space (utilities included) for $3,000 per month. Her total revenue for the year was $100,000. If Christine hadn't worked as a consultant, she would have worked at a real estate firm earning $40,000 a year. Last year, Christine's explicit costs were ______, and her implicit costs were ______.
Answer:
Explicit costs - $51,000
Explicit costs are those for which a person incurs in actual spending of money. In this case, Christine had to pay $15,000 in wages, and $36,000 in rent ($3,000 x 12). These are expenses that she had to pay money for, and that had to be accounted for in the accounting books, and in the financial statements. These are in other words, explicit costs.
Implicit costs - $40,000
Implicit costs are simply the opportunity costs. An opportunity cost is the cost of the next more valuable alternative when faced with two or more options. No money is paid for this costs. The implicit costs for Christine were the $40,000 that she not receive as wages if she had continued working at a real state firm.
Pestro manufactures a herbicide that is used in the parks in Metroville. After the parks were sprayed with the herbicide, a group of children became ill and required hospitalization. Two dogs that were also in the park that day died. The parents of the children and the dog owners could:____.
a. not bring suit against the city.
b. only bring suit against the city.
c. not bring suit against Pestro because of a lack of privity.
d. bring suit against Pestro under Section 402A even though there is no privity.
Answer:
d. bring suit against Pestro under Section 402A even though there is no privity.
Explanation:
Section 402A enforces strict liability for physical harm that is caused a by the product sold to a buyer by a seller.
It states that if a seller sells a defective product that is unreasonably dangerous to an end user, the seller will be liable for any physical harm that results from its use.
Privity is when a contractual relationship exists between different parties in a transaction.
In the given scenario even without a privity the parents of the children and the dogs can bring suit against Pestro under Section 402A even though there is no privity.
They don't have to have a direct contractual relationship with Pestro.
BrandCo currently has 65.6 million shares outstanding. If BrandCo's shares are traing at $57 per share, what is the company's market capitalization (i.e., value of equity)
Answer:
$3,739.20 million
Explanation:
Calculating the company's market capitalization
- 65.6 million shares outstanding
- If BrandCo's shares are trading at $57 per share
Company's market capitalization = Shares outstanding * Current price
Company's market capitalization = 65.6 million shares * $57
Company's market capitalization = $3,739.20 million
When a firm invests in a risky project that happens to be highly profitable, bondholders also enjoy a higher payoff than what a less risky project would produce the same way as stockholders would.
a. True
b. False
Answer:
the answer is false mark me brainlist
Scholastic Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below: Eastern Tour Western Tour Projected revenue $ 15,000 $ 18,000 Variable costs 1,000 8,000 Fixed costs 5,000 5,000 Profit $ 9,000 $ 5,000 What are the incremental (differential) costs of the Western Tour
Answer:
$7,000
Explanation:
The computation of the incremental (differential) costs of the Western Tour is shown below:
Total cost for eastern tour
= variable cost + fixed cost
= $1,000 + $5,000
= $6,000
And, the total cost for western tour is
= variable cost + fixed cost
= $8,000 + $5,000
= $13,000
So, the different in the cost is
= $13,000 - $6,000
= $7,000
You want to have $19,000 in 7 years for a dream vacation. If you can earn an interest rate of .3 percent per month, how much will you have to deposit today
Answer:
Initial investment= $14,773.22
Explanation:
Giving the following information:
Future value (FV)= $19,000
Number of periods (n)= 7*12= 84 months
Interest rate (i)= 0.003
To calculate the initial investment (PV), we need to use the following formula:
PV= FV / (1 + i)^n
PV= 19,000 / (1.003^84)
PV= $14,773.22
Assume the BigMac is sold at US$5 in US and 3 Euro in Germany. Let's assume the current spot exchange rate is 1.21 US$/Euro. If we believe in th PPP theory, US$ should _____ against Euro. Group of answer choices appreciate depreciate
Answer:
depreciate
Explanation:
Right now the relative value of the dollar is too high. If we follow the purchasing power parity theory, the value of the US dollar against the euro should be:
current spot rate x (domestic price / foreign price) = ($1.21 / 1€) x ($5 / 3€) = $6.05 / 3€ = $2.0167 per €
During the previous year, Leveraged Inc. paid $100 million of interest expense, and its average rate of interest for the year was 8%. The company's ROE is 18.4%, and it pays no dividends. Estimate next year's interest expense assuming that interest rates will fall by 34% and the company keeps a constant equity multiplier, Calculate next year's estimated interest expense
Answer:
$67214400
Explanation:
Average rate of interest = 8% = 0.08
Amount paid by leveraged Inc ( previous year ) = $100 million
Growth rate retention = 1 ( since company pays no dividend )
ROE = 18.4% = 0.184
Determine next year's estimated interest expense
Given that Interest rates will fall by 34%
interest expenses = $100,000,000
estimated Interest rate = 0.34
First step : calculate total debt
= interest expense / interest rate
= 100,000,000 / 0.08 = $1,250,000,000
next determine the growth rate
= ROE * growth rate retention = 0.184 * 1 = 0.184
next determine next year's debt
= Total debt * ( 1 + 0.184 )
= 1,250,000,000 * 1.0184 = $1,273,000,000
next determine Interest rate for next year
= interest rate - ( Interest rate * estimated interest rate )
= 0.08 - ( 0.34 * 0.08 ) = 0.0528 = 5.28%
Finally determine next year's estimated interest expense
= 5.28% * $1,273,000,000
= 0.0528 * 1,273,000,000 = $67214400
You are an adviser to the Indian government. Until now, government policy in India has been to severely limit imports into India, resulting also in a low level of Indian exports. The government is considering a policy shift toward much freer trade. What are the three strongest arguments that you can offer to the Indian government about why the policy shift to freer trade is desirable for India
Answer:
1. The size of the economy as a whole grows as a result of free trade.
2. Consumers benefit from free trade.
3. Free trade can reduce cost of trading:
Explanation:
The three strongest arguments that you can offer to the Indian government about why the policy shift to freer trade is desirable for India are as follows:
1. The size of the economy as a whole grows as a result of free trade: It provides for more efficient production of goods and services. This is because it encourages goods and services to be created in areas with the finest natural resources, infrastructure, or skills and experience. It boosts productivity, which can lead to greater long-term wages. There is universal consensus that growing global trade has boosted economic growth in recent decades.
2. Consumers benefit from free trade: By removing barriers and promoting competition, it lowers prices. Quality and choice are likely to improve as a result of increased competition.
3. Free trade can reduce cost of trading: Non-tariff barriers can be reduced, resulting in less red tape and lower trading costs. Companies that deal in multiple nations might reduce their compliance expenses by working with a single set of laws. In principle, this will lower the cost of goods and services.
When there is excess supply (surplus) what will happen?
Answer:
If there is excess supply, then the price will fall.
Explanation:
More supply would reduce the demand and hence, price would adjust to meet the equilibrium between demand and supply
Sheffield Corp. owns the following assets: Asset Cost Salvage Estimated Useful Life A $540000 $42000 10 years B 201000 23500 5 years C 490000 22000 12 years What is the composite life of Sheffield's assets?
Answer:
The composite life is 9.19.
Explanation:
Below is the calculation for composite life of assets:
Composite life = Total Depreciable Cost ÷ Total Annual Depreciation
Composite life = 1143500 ÷ 124300
Composite life = 9.19
The composite life is 9.19.
Agreement and disagreement among economists
Suppose that Hubert, an economist from a university in Arizona, and Kate, an economist from a school of industrial relations, are arguing over saving incentives. The following dialogue shows an excerpt from their debate:
Kate: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.
Hubert: I believe that a cut In income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.
Kate: I actually feel that raising the top Income tax rate would reduce the budget deficit more effectively.
The disagreement between these economists is most likely due to_____.
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
A. Lawyers make up an excessive percentage of elected officials.
B. Tariffs and Import quotas generally reduce economic welfare.
C. Minimum wage laws do more to harm low-skilled workers than help them.
Answer and Explanation:
The disagreement arise between this economist is due to the differences in the scientific judgements as they disagree due to the various scientific judgements. And, despite their differences, the proposition of two economists should be chosen at random as the tariff and import quotas normally decreased the economic welfare as it always result in deadweight loss and in this both economist should be agree for the same
Consider the following demand schedule: Price Quantity Demanded $25 20 $20 40 $15 60 $10 80 What is the price elasticity of demand between (using the arc formula) a) Price $25-$20 a) Price $20-$15 a) Price $15-$10
Answer:
3.05
1.38
0.725
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Arc elasticity of demand = midpoint change in quantity demanded / midpoint change in price
Midpoint change in quantity demanded = change in quantity demanded / average of both demands
Price $25-$20
change in quantity demanded = 40 - 20 = 20
average of both demands = (40 + 20) /2 = 30
Midpoint change in quantity demanded = 20/30 = 0.67
midpoint change in price = change in price / average of both price
change in price = $25 - $20 = $5
average of both price = ($25 + $20) / 2 = 22.5
Price $20-$15
change in quantity demanded = 60 - 40 = 20
average of both demands = (60 + 40) /2 = 50
Midpoint change in quantity demanded = 20/50 = 0.4
midpoint change in price = change in price / average of both price
change in price = $20 - $15 = $5
average of both price = ($15 + $20) / 2 = 17.5
midpoint change in price = 5 / 17.5 = 0.29
0.4/0.29 = 1.38
Price elasticity of demand = 0.67 / 0.22 = 3.05
change in quantity demanded = 80 - 60 = 20
average of both demands = (80 + 60) /2 = 70
Midpoint change in quantity demanded = 20/70 = 0.29
midpoint change in price = change in price / average of both price
change in price = $15 - $10 = $5
average of both price = ($15 + $10) / 2 = 12.5
5/12.5 = 0.4
Sales 101 teaches you to: Always just answer the question the customer has Never try to get more information about what the customer needs Always answer a question with another question Never look the customer in the eye
Answer:
I think it's A) Always just answer the question the customer has.
Explanation:
I know it's not D) "Never look the customer in the eye."
I don't think it's C) "Always answer a question with another question" that just seems like it would be confusing for the customer.
And I don't think it's B) "Never try to get more information about what the customer needs" because part of you're job as a salesman is find out what the customer needs.
So that leaves answer choice A
A rectangle has length xcm and width (x-1)cm. If the perimeter is 14cm,
Find the value of x.
Answer:
x = 4 cm
Explanation:
Given that,
Length of a rectangle = x cm
Width = (x-1) cm
The perimeter of the rectangle = 14 cm
We need to find the value of x.
We know that,
Perimeter = sum of all sides
14 = 2(x+x-1)
7 = 2x-1
8 = 2x
x = 4
So, the value of x is equal to 4 cm.
Betty (25 years old) studied music education in college and graduated a year ago. She currently works as a music teacher at a year-round private middle school. Her gross pay is $39600 a year, or $3300 a month. After taxes, health insurance, and other paycheck deductions, her net pay is $35900 a year. Based on recommended guidelines, how much money should Betty be saving each month
Answer:
Based on recommended guidelines, Betty should be saving at least $598.33 each month.
Explanation:
a) Data and Calculations:
Gross pay per year = $39,600
Gross pay per month = $3,300 ($39,600/12)
Net pay per year after deductions = $35,900
Total deductions for taxes, health insurance, etc. = $3,700 ($39,600 - $35,900)
Net pay per month after deductions = $2,992 ($35,900/12)
b) Based on the 50-30-20 budgeting method of spending 50% income on essentials, saving 20%, and leaving 30% for discretionary purchases, Betty should be saving at least $598.33 per month ($2,992 * 20%).
About 5% of hourly paid workers in a region earn the prevailing minimum wage or less. A grocery chain offers discount rates to companies that have at least 30 employees who earn the prevailing minimum wage or less. Complete parts (a) through (c) below.
a. Company A has 285 employees. What is the probability that Company A will get the discount? (Round to four decimal places as needed.)
b. Company B has 502 employees. What is the probability that Company B will get the discount? (Round to four decimal places as needed.)
c. Company C has 1033 employees. What is the probability that Company C will get the discount? (Round to four decimal places as needed.)
Answer:
a. 0.0000
b. 0.1841
c. 0.9992
Explanation:
a. n = 285
p = 5% = 0.05
μ = np = 285 x 0.05
= 14.25
we fnd the standard deviation
sd = √np(1-p)
= [tex]\sqrt{285*0.05*0.95}[/tex]
= 3.6793
we find the z score
x = 30-0.5 = 29.5
[tex]z=\frac{29.5-14.25}{3.6793} \\= 4.14[/tex]
using the microsoft excel function
1-NORMSDIST(4.14)
probability = 1 -0.999982
= 0.0000
b.
n = 502
p = 0.05
np = 502x0.05
= 25.1
sd = [tex]\sqrt{np(1-p)}[/tex]
= [tex]\sqrt{502*0.05*0.95} \\= 4.8831[/tex]
x = 29.5
[tex]z = \frac{29.5-25.1}{4.8831} \\= 0.90[/tex]
1 - NORMSDIST(0.90)
= 1 - 0.815939875
PROB = 0.1841
c. n = 1033
p = 0.05
np = 1033*0.05
= 51.65
sd [tex]\sqrt{np(1-p)} \\= \sqrt{1033*0.05*0.95}[/tex]
= 7.0048
x = 29.5
[tex]z=\frac{29.5-51.65}{7.0048} \\= -3.16[/tex]
probability =
1 - normsdist(-3.16)
= 1 - 0.000788846
= 0.9992
Aurous Incorporated planned to use $35 of material per unit but actually used $34 of material per unit, and planned to make 1,500 units but actually made 1,300 units. The sales-volume variance for materials is ________.
Answer:
45,500
Explanation:
1,300 unites multiplied bye 35 unites is 45,500 (hope this helps)
The sales-volume variance for materials is 7,000, favorable.
What is a sales-volume variance?The sales volume variance is calculated by multiplying the actual and expected number of units sold by the budgeted price per unit. Sales volume variance is a metric used by professionals to evaluate their sales performance by calculating the difference between their actual and budgeted sales volume.
The formula for calculating sales volume variance is:-
Sales-volume variance for materials = (Budgeted quantity- Actual quantity) × Standard Price
Budgeted quantity = 1,500 units
Actual quantity = 1,300 units
Standard price = $35
Sales-volume variance for materials = (1,500-1,300) ×$35
Sales-volume variance for materials = 7,000 favorable.
Therefore, the sales-volume variance for materials is 7,000 favorable.
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Poole Co. acquired 100% of Mullen Inc. on January 3, 2021. During 2021, Poole sold goods to Mullen for $2,500,000 that cost Poole $1,850,000. Mullen still owned 30% of the goods at the end of the year. Cost of goods sold was $11,200,000 for Poole and $6,600,000 for Mullen. What was consolidated cost of goods sold?
a) $15,105,000.
b) $15,300,000.
c) $15,495,000.
d) $17,800,000.
Answer:
c) $15,495,000.
Explanation:
Calculation to determine the consolidated cost of goods sold
First step is to calculate the Intra-Entity Gross Profit Deferred
Intra-Entity Gross Profit Deferred =($2,500,000 − $1,850,000)*30%
Intra-Entity Gross Profit Deferred =$650,000 × (30%)
Intra-Entity Gross Profit Deferred =$195,000
Now let calculate the Consolidated COGS
Using this formula
Consolidated COGS = Parent's COGS+Subsidiary's COGS -COGS in Intra-Entity Transfer+Intra-Entity Gross Profit Deferred
Let plug in the formula
Consolidated COGS=$11,200,000+ $6,600,000− $2,500,000+ $195,000
Consolidated COGS= $15,495,000
Therefore the consolidated cost of goods sold is
$15,495,000
Under accounting principles generally accepted in the United States, in order for an item to qualify for recognition in the financial statements of a company, the item must I. Be measurable in monetary terms II. Reflect the consensus expectations of investors III. Meet the definition of an element of the financial statements
Answer:
I Be measurable in monetary term
III Meet the definition of an element of the financial statements
Explanation:
Financial Statements can be regarded as reports which provide the detail of the financial information entry, these includes assets, incomes, liabilities,as well as equities, and sone information which are during the period of time.
Therefore, for an item to be able to qualify for recognition in a particular financial statements,
the definition of an element of financial statements must be met hich are;
1) measurable
2) be relevant to the particular users
3) information must be verifiable
It should be noted that Under accounting principles generally accepted in the United States, in order for an item to qualify for recognition in the financial statements of a company, the item must be;I )Be measurable in monetary term
III)Meet the definition of an element of the financial statements
Ferrar Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment. Select one: a. test b. test c. test d. test
Complete Question:
Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below: Sales revenues, Consumer $ 680,000 Sales revenues, Commercial $ 280,000 Variable expenses, Consumer $ 394,000 Variable expenses, Commercial $ 143,000 Traceable fixed expenses, Consumer $ 102,000 Traceable fixed expenses, Commercial $ 45,000 In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment. A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:
Answer:
Ferrar Corporation
A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:
= $66,000.
Explanation:
a) Data and Calculations:
Sales revenues, Consumer $ 680,000
Sales revenues, Commercial $ 280,000
Variable expenses, Consumer $ 394,000
Variable expenses, Commercial $ 143,000
Traceable fixed expenses, Consumer $ 102,000
Traceable fixed expenses, Commercial $ 45,000
In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.
Segmented Income Statement for the month ended March 31
Consumer Commercial Total
Sales revenue $ 680,000 $ 280,000 $ 960,000
Variable expenses 394,000 143,000 537,000
Contribution margin $286,000 $137,000 $423,000
Traceable fixed expenses 102,000 45,000 147,000
Common fixed expenses 122,000 88,000 210,000
Total fixed expenses $224,000 $133,000 $357,000
Net income (loss) $62,000 $4,000 $66,000
A perfectly competitive firm, with MC=q operates in a market character,zed by the following market demand and supply conditions:
Demand: Q=20000-100P
Supply: Q=100P
How much output does this competitive firm produce to maximize profit? Show your work graphically and algebraically.
Answer: 10000 units
Explanation:
First, we've to determine the equilibrium price which will be gotten when we equate the demand to the supply which will be:
20000 - 100P = 100P
100P + 100P = 20000
200P = 20000
P = 20000/200
P = 100
Since Q = 100P
Q = 100 × 100
Q = 10000
The competitive firm will produce 10000 units to maximize profit.
In 2010,Chesley Inc. acquired Corrigan Ltd. in a hostile takeover. However, the expected synergies never materialized. In 2013, Chesley decided to write-off $45 million of Goodwill on the financial statements to recognize that the Goodwill had become impaired.Which of the following items would be decreased by the impairment of Goodwill?
a- Total Assetsb- Net Incomec- Cash from Operating Activitiesd- Cash from Financing Activitiese- Cash from Investing Activities
Answer:
a- Total Assets
Explanation:
Impairment write downs are not cash related events but an accounting entry made to reduce the carrying amount when Carrying Amount of an Asset is found to be greater than the Recoverable Value of the Asset.
Carrying Amount of an Asset is Cost less Accumulated depreciation of an asset. While the Recoverable Value of the Asset is the higher of Fair Value and Value in use of an asset.
Therefore, only Total Assets decrease as a result of impairment of Goodwill.
"Viserion, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 106 percent of face value. The issue makes semiannual payments and has an embedded cost of 7 percent annually. What is the company's pretax cost of debt?"
Answer:
6.37 %
Explanation:
Debt in this case is represented by Bonds. The yield to maturity of a bond is the cost of debt. Yield to maturity is the interest rate used to determine Present Value of Coupons and Principle amount.
Most bond prices are expressed per $1,000. Therefore we will use this as the Face Value.
Pretax cost of debt calculation :
FV = $1,000
PV = $1,000 x 106 % = - $1,060
PMT = ($1,000 x 7 %) ÷ 2 = $35
N = 15 x 2 = 30
P/YR = 2
I/YR = ??
Using a financial calculator, the yield to maturity of the bond and hence the pretax cost of debt (i/yr) is 6.37 %
If firms expect prices to be higher in the future and the product is not perishable, then Multiple Choice the current supply curve shifts to the right. the current supply curve shifts to the left. none of the statements associated with this question are correct. producers produce more output to hold back for the future.
Answer:
the current supply curve shifts to the left.
Explanation:
A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.
Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services.
Thus, it's the amount of money a customer or consumer buying goods and services are willing to pay for the goods and services being offered. The price of goods and services are primarily being set by the seller or service provider.
In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.
One of the importance associated with the pricing of products is that, it improves the image of a business firm.
Hence, if firms expect prices of products to be higher or rise in the future and the product is not perishable i.e wouldn't get spoilt in a short time, then the current supply curve shifts to the left and as such only small quantity of the product would be supplied by the business firm.
An aggregate supply curve gives the relationship between the aggregate price level for goods or services and the quantity of aggregate output supplied in an economy at a specific period of time.
Aggregate supply (AS) refers to the total quantity of output (goods and services) that firms are willing to produce and sell at a given price in an economy at a particular period of time.
The Commonwealth of Virginia filed suit in October 2014, against Northern Timber Corporation seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. When the financial statements were issued in 2015, Northern had not reached a settlement with state authorities, but legal counsel advised Northern Timber that it was probable the ultimate settlement would be $1,000,000 in penalties. The following entry was recorded: Loss—litigation ................................................................................................... 1,000,000 Liability—litigation ........................................................................................... 1,000,000 Late in 2016, a settlement was reached with state authorities to pay a total of $600,000 to cover the cost of violations. Required: 1. Prepare any journal entries related to the change. 2. Briefly describe other steps Northern should take to report the change.
Answer:
Northern Timber Corporation
1. Journal entries to record the change:
Debit Litigation Liability $1,000,000
Credit Cash $600,000
Credit Litigation Loss $400,000
To record the payment of the litigation liability and the reduction of litigation loss by $400,000.
2. Northern can restate the 2014 and 2015 Retained Earnings to reflect the change in the litigation loss.
Explanation:
a) Data and Calculations:
Records of probable loss from ultimate settlement:
2014:
Loss—litigation 1,000,000
Liability—litigation 1,000,000
2016:
Agreed settlement = $600,000
Analysis of Entries:
Litigation Liability $1,000,000
Cash $600,000
Litigation Loss $400,000
Mary runs over a deer with her car. The ACV of her vehicle is $7,250. To repair the damages caused in the accident, it will cost $4,375. What will the insurer likely pay Mary for this claim, assuming that her COLLISION deductible is $500, and her OTHER THAN COLLISION deductible is $200
Answer: $4175
Explanation:
The Other Than Collision coverage is the payment to repair a vehicle when the damage caused isn't when one collides with another vehicle.
In this case, since Mary runs over a deer with her car, we'll deduct the other than collision deductible from her cost of the repair and this will be:
= $4375 - $200
= $4175
The insurer will pay Mary $4175
Allocating Joint Costs Using the Net Realizable Value Method
A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,300. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:
Product Gallons Further Processing
Cost per Gallon Eventual Market
Price per Gallon
L-Ten 3,200 $0.70 $2.10
Triol 3,700 1.10 5.40
Pioze 2,000 1.50 6.20
Required:
1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades Allocation
L-Ten $
Triol
Pioze
Total $
2. What if it cost $2.10 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades Allocation
L-Ten $
Triol
Pioze
Total $
Answer:
Allocating Joint Costs Using the Net Realizable Value Method
1. Joint Cost
Grades Allocation
L-Ten $1,850
Triol 6,569
Pioze 3,881
Total $12,300
2. Joint Cost
Grades Allocation
L-Ten $2,112
Triol 5,756
Pioze 4,432
Total $12,300
Explanation:
a) Data and Calculations:
Cost of each production run = $12,300
Product Gallons Further Processing Eventual Market Net Realizable
Cost per Gallon Price per Gallon Value
L-Ten 3,200 $0.70 $2.10 $4,480
Triol 3,700 1.10 5.40 15,910
Pioze 2,000 1.50 6.20 9,400
Total 8,900 $29,790
Allocation of join cost:
L-Ten = $4,480/$29,790 * $12,300 = $1,850
Triol = $15,910/$29,790 * $12,300 = $6,569
Pioze = $9,400/$29,790 * $12,300 = $3,881
Product Gallons Further Processing Eventual Market Net Realizable
Cost per Gallon Price per Gallon Value
L-Ten 3,200 $0.70 $2.10 $4,480
Triol 3,700 2.10 5.40 12,210
Pioze 2,000 1.50 6.20 9,400
Total 8,900 $26,090
Allocation of join cost:
L-Ten = $4,480/$26,090 * $12,300 = $2,112
Triol = $12,210/$26,090 * $12,300 = $5,756
Pioze = $9,400/$26,090 * $12,300 = $4,432
Demand is said to be __________ when the quantity demanded is not very responsive to changes in price. Group of answer choices unit elastic independent inelastic elastic
Answer:
Inelastic
Explanation:
Inelastic is the correct answer because elasticity is the magnitude that exhibits the responsiveness of demand for the commodity when there is a change in price. For example, if the price changes by 100% and due to the change in price, the change in quantity is only 10%. Then it can be deduced that the elasticity is inelastic because the percentage is lower than the percentage in price.
epper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Rent Square feet of floor space $ 49,000 Advertising Amount of dollar sales $ 80,000 Administrative Number of employees $ 120,000 The following information is available for its three operating (sales) departments: Department Square Feet Dollar Sales Number of employees A 5,500 $ 355,000 31 B 5,900 $ 375,000 33 C 6,100 $ 520,000 35 Totals 17,500 $ 1,250,000 99 What is the total advertising expense allocated to Department B
Answer:
Pepper Department Store
The total advertising expense allocated to Department B is:
= $24,000.
Explanation:
a) Data and Calculations:
Expense Basis for allocation Amount
Rent Square feet of floor space $ 49,000
Advertising Amount of dollar sales $ 80,000
Administrative Number of employees $ 120,000
Department Square Feet Dollar Sales Number of employees
A 5,500 $ 355,000 31
B 5,900 $ 375,000 33
C 6,100 $ 520,000 35
Totals 17,500 $ 1,250,000 99
Advertising Expense Allocation:
Department A = $22,720 (355,000/$1,250,000 * $80,000)
Department B = $24,000 ($375,000/$1,250,000 * $80,000)
Department C = $33,280 ($520,000/$1,250,000 * $80,000)