Answer: 2.36
Explanation: Hours per machine * # of machines
325 * 3 = 975
Units produced/ Machine Hour
2,300/975 = 2.36
The average of the monthly productivity figures is 2.36.
Who are managers?"Manager can be defined as a person who is in charge of managing or looking after an organization he is an acting leader who helps in delegating the responsibilities as well as setting the goals also he possesses some leadership qualities that help in running an organization smoothly."
Hours per machine 325
In total there are 3 units that are producing that the operation manager needs to focus on intaking the decision.
Total machine hour is calculated as:
Hours per machine * number of machines
= 325 * 3
= 975
The average of monthly productivity that the operating manager needs to incur for the smooth running of the business is:
Units produced/ Machine Hour
= 2,300/975
= 2.36
Learn more about managers, here:
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A (Static) Using T accounts to record all business transactions. LO 3-1, 3-2, 3-4
The following accounts and transactions are for Vincent Sutton, Landscape Consultant.
Transactions:
Sutton invested $90,000 in cash to start the business.
Paid $6,000 for the current month’s rent.
Bought office furniture for $10,580 in cash.
Performed services for $8,200 in cash.
Paid $1,250 for the monthly telephone bill.
Performed services for $14,000 on credit.
Purchased a computer and copier for $18,000; paid $7,200 in cash immediately with the balance due in 30 days.
Received $7,000 from credit clients.
Paid $2,800 in cash for office cleaning services for the month.
Purchased additional office chairs for $5,800; received credit terms of 30 days.
Purchased office equipment for $22,000 and paid half of this amount in cash immediately; the balance is due in 30 days.
Issued a check for $9,400 to pay salaries.
Performed services for $14,500 in cash.
Performed services for $16,000 on credit.
Collected $8,000 on accounts receivable from charge customers.
Issued a check for $2,900 in partial payment of the amount owed for office chairs.
Paid $725 to a duplicating company for photocopy work performed during the month.
Paid $1,280 for the monthly electric bill.
Sutton withdrew $5,500 in cash for personal expenses.
Post the above transactions into the appropriate T accounts.
Analyze:
What liabilities does the business have after all transactions have been recorded?
Complete this question by entering your answers in the tabs below.
Transactions
Analyze
Post the above transactions into the appropriate T accounts.
Cash Accounts Receivable
Bal.
Bal.
Office Furniture Office Equipment
Bal. Bal.
Accounts Payable Vincent Sutton, Capital
Bal.
Bal.
Vincent Sutton, Drawing Fees Income
Bal.
Bal.
Rent Expense Utilities Expense
Bal. Bal.
Salaries Expense Telephone Expense
Bal. Bal.
Miscellaneous Expense
Bal.
Complete this question by entering your answers in the tabs below.
What liabilities does the business have after all transactions have been recorded?
Liabilities
Answer:
It is very difficult to record T accounts since there is not a lot of room here and things get complicated very easily. So I used an excel spreadsheet to post the accounts on an accounting equation format.
Assets increase when they are debited and they decrease when they are credited. The opposite happens to liabilities and equity, they increase when they are credited and decrease when they are debited. Service revenue is credited, while all expenses are debited.
The reason why the drawings account has a negative balance is that even though it is an equity account, it has a debit balance since it decreases capital.
In order for the equation to balance, you have to close the accounts, but that was not a requirement of the question.
What liabilities does the business have after all transactions have been recorded?
the only liability account is accounts payable with a credit balance of $24,700
Your supervisor has come to you with the following list of expenditures for the year and is asking you whether they should be capitalized or expensed as repairs and maintenance. Indicate all of the expenditures that would most appropriately be capitalized.
1. Re-painted the office building.
2. Added a new wing onto the office building.
3. Took their fleet of cars in for servicing (changing the oil, etc.).
4. Added newer electronic locks on the doors in the production building.
5. Had an engine rebuilt in one of their fleet cars.
Answer:
Capitalized Expenditures:
2. Added a new wing onto the office building.
5. Had an engine rebuilt in one of their fleet cars.
Explanation:
Capitalization is the process of delaying the full recognition of an expense for the acquisition of a new asset with long-term life so that the costs can be treated as an expense gradually over its useful life through an accounting method known as depreciation or amortization.
The criteria for capitalizing expenditure depend on whether the expenditure is necessary to bring the asset to the condition and location where it can be operated as desired by the management. It must also meet the threshold amount set by management for capitalization. This is because some assets can be used for more than one year and still they are not regarded as capital assets. Example is a stapling machine that costs less than a dollar.
Marconi Co. has the following information available for the current year: Net Sales $ 765,000 Bad Debt Expense 45,000 Accounts Receivable, Beginning of Year 135,000 Accounts Receivable, End of Year 70,000 Allowance For Doubtful Accounts, Beginning of Year 57,000 Allowance For Doubtful Accounts, End of Year 77,000 What was the amount of write-offs during the year?
Answer:
$25,000
Explanation:
When there is a movement in allowance for bad debt account, it is usually as a result of bad debts and bad debts already written off.
The amount of write offs during the year is computed as follows;
Amount write off = Beginning allowance for doubtful accounts + Bad debt expenses - Closing allowance for doubtful accounts
= $57,000 + $45,000 - $77,000
= $25,000
Therefore, the amount of write offs during the year is $25,000
there is no important
a. Using the information below, and assuming that you want to maintain your purchasing power from 2011, what nominal wage should you demand in each of the given years? Instructions: Round your answers to 2 decimal places. CPI Values and Nominal Wages YearCPINominal Wage (dollars)2011211.7$78,5202012213.5370902013223.82014221.1 b. Assume that your annual wage in 2014 was $82,920. This represents
Answer:
a)
Year CPI Nominal Wage (dollars)
2011 211.7 $78,520
2012 213.5 = (213.5/211.7) x $78,520 = $79,187.62
2013 223.8 = (223.8/211.7) x $78,520 = $83,007.92
2014 221.1 = (221.1/211.7) x $78,520 = $82,006.48
b) if you annual wage in 2014 was $82,920, it would be equivalent to (211.7/221.1) x $82,920 = $79,394.68 in 2011.
The CPI can be used to calculate equivalent dollars and works both ways, to determine past or future equivalencies.
Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 1478), as summarized below Job Number:1478 Date Started: 4/07/20x8 Date Completed: 4/22/20x8 Description: Cherry kitchen cabinets Applied Manufacturing Overhead Hours Direct Materials Direct Labor Req No Ticket 128 Amount Hours Amount Rate Amount $375 235 385 18 414 130 588 391 25 395 140 133 9 243 401 215 52 Total 965 Total $1,244 Cost Summary Direct Material Cost 965 Direct Labor Cost 1,244 Applied Manufacturing Overhead Total Cost Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour.
(a) How much overhead would be applied to Job Number 1478 Applied Manufacturing Overhead
(b) What is the total cost of Job Number 1478?
Answer:
B
Explanation:
Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 1478), as summarized below Job Number:1478 Date Started: 4/07/20x8 Date Completed: 4/22/20x8 Description: Cherry kitchen cabinets Applied Manufacturing Overhead Hours Direct Materials Direct Labor Req No Ticket 128 Amount Hours Amount Rate Amount $375 235 385 18 414 130 588 391 25 395 140 133 9 243 401 215 52 Total 965 Total $1,244 Cost Summary Direct Material Cost 965 Direct Labor Cost 1,244 Applied Manufacturing Overhead Total Cost Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour.
Bill and Ted are deciding what musical instruments they want to learn pick between the guitar, keyboard, and the drums to play for their band. They can They both want to have a good band, but also each has a preference over what to play. Both like the guitar over all else. However, Bill likes the keyboard more than the drums and Ted likes the drums more than the keyboard. What is crucial is that each chooses a different instrument, otherwise the band is pretty terrible. The actual combination does not affect the quality of the band. One night, Bill and Ted simultaneously reveal to each other what instrument they have bought and learned to play. Since they bought AND learned to play the instru- are committed to it! Given the information above, answer the following: ment they
1. Does either Bill or Ted have a dominant/dominated strategy? Explain
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain
4. Can there exist a Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain
5. Can there exist a Nash Equlibrium in which Bill picks the guitar and Ted picks the drums? Explain
Answer and Explanation:
1. There is no dominant strategy as each person has to respond with a different strategy like using a different instrument depending on the instrument chosen by the other to achieve best payoff
2. If Bill picks keyboard then it would be best for Ted to pick guitar as this is his preferred instrument which would bring best payoff
3. If Ted picks guitar, then bull should pick keyboard which he prefers and would be the best payoff
4. A nash equilibrium would not exist here since Ted should choose guitar if bull chooses drums and bill should choose guitar if Ted chooses keyboard
5. A Nash equilibrium can exist here since Ted should choose drums when bill chooses guitar.
The income statement lists all the
account balances for the period.
A. revenue and expense
B. liability and capital
C. temporary and permanent
D. asset and withdrawal
Answer:
A. revenue and expense
Explanation:
An income statement is among the three important financial statements prepared by a business entity. It summarizes all incomes (revenues) and expenses (costs) of a company in a particular financial year. Total costs are subtracted from the total revenue to get the net income.
An income statement is prepared to show the profits of a business in a particular financial year. A positive net income indicates profits, while a negative net income denotes losses.
World Company expects to operate at 80% of its productive capacity of 67,500 units per month. At this planned level, the company expects to use 32,400 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.600 direct labor hour per unit. At the 80% capacity level, the total budgeted cost includes $68,040 fixed overhead cost and $408,240 variable overhead cost. In the current month, the company incurred $472,000 actual overhead and 29,400 actual labor hours while producing 51,000 units.
Required:
a. Compute the overhead volume variance.
b. Compute the overhead controllable variance.
Answer:
1. $3,780 Unfavorable
2. $453,600 Overhead controllable variance
Explanation:
Req. 1
Fixed Overhead Applied
Fixed OH per DL hr. ($68,040 ÷ $32,400) = 2.1
Standard DL hours = 0.60 * $51,000 = $30,600
Fixed OH applied = 2.1 * $30,600 = $64,260
Volume variance.
Total fixed OH applied $64,260
Total budgeted fixed OH $68,040
Fixed OH volume variance $3,780 Unfavorable
Req. 2
Overhead controllable variance.
Total actual overhead $ 472,000
Flexible budget overhead
Variable = $408,240 ÷ $32,400 = 12.6
=> $30,600 * 12.6 = $385,560
Fixed. $68,040
Total $453,600 Overhead controllable variance
On average, your firm sells $33,100 of items on credit each day. The average inventory period is 35 days and your operating cycle is 55 days. What is the average accounts receivable balance
Answer:
The average account receivable balance is $662,000
Explanation:
The computation of the average account receivable balance is shown below:
= Sells items on credit each day × (operating cycle - average inventory period)
= $33,100 × (55 days - 35 days )
= $33,100 × 20 days
= $662,000
hence, the average account receivable balance is $662,000. The same is to be considered
Materials and manufacturing labor variances, standard costsDunn, Inc., is a privately held furniture manufacturer. For August 2014, Dunn had the following standards for one of its products, a wicker chair:The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,000; square yards of input purchased and used, 3,700; price per square yard, $5.10; direct manufacturing labor costs, $8,820; actual hours of input, 900; labor price per hour, $9.80.Required:1. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred.2. Suppose 6,000 square yards of materials were purchased (at $5.10 per square yard), even though only 3,700 square yards were used. Suppose further that variances are identified at their most timely control point; accordingly, direct materials price variances are isolated and traced at the time of purchase to the purchasing department rather than to the production department. Compute the price and efficiency variances under this approach.
Answer:
Please see answers below
Explanation:
1. Material price variance = AQ [ AP - SP]
= [ $5.10 - $5.0] × 3,700
= $370 (U)
Material efficiency variance = [AQ - SQ] × SP
= [3,700 - 2,000*2] × $5.0
= - $1,500 (F)
Flexible variance budget variance = Material price variance + Material efficiency variance
= $370(U) + -$1,500(F)
= -$1,130(F)
Reasons for unfavorable price variance
• When the purchase manager is not too skillful at buying materials needed for production
• When there is an unexpected increase in price of materials
Reasons for favorable efficiency variance
• Usage of high quality material
• Skilled labourers use less materials than budgeted
Direct labor rate variance = [AR - SR] × AH
= [$9.80 - $10] × 900
= -$180 (F)
Direct labor efficiency variance = [AH - SH] × SR
= [900 - 2,000*0.5] × $10
= -$1,000(F)
Flexible budget variance = Direct labor rate variance + Direct labor efficiency variance
= -$180(F) + -$1,000(F)
= -$1,180
Reasons for favorable rate variance
• When there is reduction in labor rate due to recession in an economy
• When more of semi skilled or unskilled labor are employed.
Reasons for favorable efficiency variance
• Usage of high quality raw materials
• When plant facilities are restructured, it means that labor would be more effective.
2. Material price variance = [$AP - SP] × AQ
= [$5.10 - $5.0] × 6,000
= $600(F)
Material efficiency variance = [AQ - SQ] × SP
= [6,000 - 2,000 × 0.5] × $5.0
= $25,000(F)
Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Round your per unit costs to 2 decimal places.)
Answer:
The information about inventory and sales is missing, so I looked for a similar question:
Beginning inventory, January 1: 390 units at $3.80 Purchase January 9: 90 units at $4.00 Purchase January 25: 120 units at $4.10 Sale January 26: 430 units Ending inventory, January 31: 170 unitsBeginning inventory on January 1: 390 $3.80 = $1,482
Purchase on January 9: 90 $4.00 = $360
Purchase on January 25: 120 $4.10 = $492
total number of units = 600
total value = $2,334
average cost per unit = $3.89
cost of goods sold = 430 units x $3.89 = $1,672.70
ending inventory = 170 units x $3.89 = $661.30
Is cost minimization equivalent or identical the concept of product maximization. True of False. Explain
Answer:
True
Explanation:
Given a certain production level, cost minimization is equal to product maximization. Cost minimization refers to the production level where average total cost per unit is lowest. On the other hand, production maximization refers to maximizing product output given certain restraints, e.g. amount of raw materials, number of labor hours, etc. Product maximization basically refers to the efficiency of production.
If someone can achieve product maximization and cost minimization, they should be maximizing profit.
Fortuna Company issued 70,000 shares of $1 par stock, with a fair value of $5 per share, for 80% of the outstanding shares of Acappella Company. The firms had the following separate balance sheets prior to the acquisition:
Assets Fortuna Acappella
Current assets $2,100,000 $ 960,000
Property, plant, and equipment (net) 4,600,000 1,300,000
Goodwill -- 240,000
Total assets $6,700,000 $2,500,000
Liabilities and Stockholders' Equity
Liabilities $3,000,000 $ 800,000
Common stock ($1 par) 800,000
Common stock ($5 par) 200,000
Paid-in capital in excess of par 2,200,000 300,000
Retained earnings 700,000 1,200,000
Total liabilities and equity $6,700,000 $2,500,000
Book values equal fair values for the assets and liabilities of Acappella Company, except for the property, plant, and equipment, which has a fair value of $1,400,000. Compute goodwill or gain recognized in the consolidated statements .
Book values equal fair values for the assets and liabilities of Acappella Company, except for the property, plant, and equipment, which have a fair value of $1,600,000.Required:
a. What is the Goodwill/Gain associated with the acquisition:
b. What is the Non-Controlling Interest recorded in the consolidated balance sheet
c. What is the balance of the assets and liabilities side of the consolidated balance sheet after the acquisition:
d.Record the two elimination entries associated with the acquisition of the company
Answer:
Part 1
$1,730,000 (Gain)
Part 2
a. $1,890,000 (Gain)
b. $560,000
c. Consolidated Assets = $9,850,000 and Consolidated Liabilities = $3,800,000
d. Journals
Journal 1
Property Plant and Equipment $300,000 (debit)
Revaluation Reserve $300,000 (credit)
Revaluation of Acappella`s Property Plant and Equipment item
Journal 2
Common Stock $1,300,000 (debit)
Retained Earnings $1,200,000 (debit)
Revaluation Reserve $100,000 (debit)
Investment in Subsidiary $350,000 (credit)
Non-Controlling Interest $560,000 (credit)
Gain on Bargain Purchase $1,890,000 (credit)
Main Elimination Journal
Explanation:
Goodwill is the excess of Purchase Consideration over the Net Assets Acquired.
Purchase Consideration (70,000 shares × $5) = $350,000
Part 1
Calculation of Net Assets Acquired
Retained Earnings $1,200,000
Common Stock $1,300,000
Revaluation $100,000
Total Net Assets Acquired $2,600,000
Therefore,
Net Assets Attributable to Fortuna Company = $2,600,000 × 80%
= $ 2,080,000
Purchase Consideration $350,000 < Net Assets Acquired ($ 2,080,000), therefore we have a gain situation of $1,730,000
Part 2
2a.
Calculation of Net Assets Acquired
Retained Earnings $1,200,000
Common Stock $1,300,000
Revaluation $300,000
Total Net Assets Acquired $2,800,000
Therefore,
Net Assets Attributable to Fortuna Company = $2,800,000 × 80%
= $ 2,240,000
Purchase Consideration $350,000 < Net Assets Acquired ($ 2,240,000), therefore we have a gain situation of $1,890,000
2b.
Calculation of Non - Controlling Interest
Note : I have elected to measure Non-Controlling Interest as proportionate to the fair value of Net Identified Assets Acquired !
Non - Controlling Interest = Non Controlled Interest % × Total Net Assets Acquired
= 20 % × $2,800,000
= $560,000
2c.
Consolidation is 100 % of Parent/ Acquirer and 100% of subsidiary (Acquired) combined.
Assets :
Fortuna Company = $6,700,000 + $350,000 = $7,050,000
Acappella Company = $2,500,000 + $300,000 = $2,800,000
Total Assets = $9,850,000
Liabilities :
Fortuna Company = $3,000,000
Acappella Company = $ 800,000
Total Liabilities = $3,800,000
2d.
Journal 1
Property Plant and Equipment $300,000 (debit)
Revaluation Reserve $300,000 (credit)
Revaluation of Acappella`s Property Plant and Equipment item
Journal 2
Common Stock $1,300,000 (debit)
Retained Earnings $1,200,000 (debit)
Revaluation Reserve $100,000 (debit)
Investment in Subsidiary $350,000 (credit)
Non-Controlling Interest $560,000 (credit)
Gain on Bargain Purchase $1,890,000 (credit)
To raise operating funds, Coyne Incorporated sold its office building to an insurance company on January 1, 2021, for $1,600,000 and immediately leased the building back. The operating lease is for 12 years of the building's estimated 20-year remaining useful life. The building has a fair value of $1,600,000 and a book value of $1,300,000 (its original cost was $2 million). The rental payments of $200,000 are payable to the insurance company each December 31. The lease has an implicit rate of 9%.
Prepare the appropriate entries for National Distribution Center on January 1, 2018 and December 31, 2018, to record the sale-leaseback and necessary adjustments.
1. Record Sale of Building
2. Record the beginning of the lease for National
3. Record the lease and interest expense for National
4. Record the amortization expense for national
Answer:
1. 1-Jan-21
Dr Cash $1,600,000
Dr Accumulated Depreciation $700,000
Cr Building $2,100,000
Cr Gain On Sale of Building (BF) $200,000
2. 1-Jan-21
Dr Right Of Use Assets ( 200000* PVAF 9% for 12 year) $1,432,000
Cr Lease Payable $1,432, 000
3. 31-Dec-21
Dr Interest Expense $128,880
Dr Lease Payment (BF) $71,120
Cr Cash $200,000
4. 31-Dec-21
Dr Amortization Expenses $71,120
Cr Right Of Use Assets $71,120
Explanation:
1. Preparation of the Journal entry to Record Sale of Building
1-Jan-21
Dr Cash $1,600,000
Dr Accumulated Depreciation $700,000
(2,000,000-1,300,000)
Cr Building $2,100,000
[(1,600,000+700,000)-200,000]
Cr Gain On Sale of Building (BF) $200,000
(To Record Lease)
2. Preparation of the journal entry to Record the beginning of the lease for National
1-Jan-21
Dr Right Of Use Assets ( 200000* PVAF 9% for 12year)
(200,000*7.16) $1,432,000
Cr Lease Payable $1,432, 000
(To Record The Leae Payable)
3. Preparation of the journal entry to Record the lease and interest expense for National
31-Dec-21
Dr Interest Exp
(1,432,000*9%) $128,880
Dr Lease Payment (BF) $71,120
(200,000-128,880)
Cr Cash $200,000
(To Record First Lease payment)
4. Preparation of the journal entry to Record the amortization expense for national
31-Dec-21
Dr Amortization Expenses $71,120
Cr Right Of Use Assets $71,120
(To Record Amortisation Expense)
To determine how students at a particular college feel about cigarette smoking in public places, all students in the college who chose to have their email address published in the college directory were sent an email with a link to an online survey. What is wrong with this sampling method?
A. Nothing, since students could go online to give their opinion.
B. Only smokers should have been surveyed.
C. They should have only sent the email to every 5th student in the directory.
D. The sampling method would result in a sample size that is too large.
E. Not all students would have an email listed in the student directory.
Answer:
b only smokers should have surveyed
Explanation:
because they actually smoke
Answer:
B
Explanation:
HOPE THIS HELP
Telecomp is a U.S.-based manufacturer of cellular telephones. It is planning to build a new manufacturing and distribution facility in either South Korea, China, Taiwan, Poland, or Mexico. The cost of the facility will differ between countries and will even vary within countries depending on the economic and political climate, including monetary exchange rates. The company has estimated the facility cost (in $ millions) in each country under three different future economic/political climates as follows.Economic/Political Climate Country Decline Same Improve South Korea 21.7 19.1 15.2 China 19.0 18.5 17.6 Taiwan 19.2 17.1 14.9 Poland 22.5 16.8 13.8 Mexico 25.0 21.2 12.5 Determine the best decision using the following decision criteria. (Note that since the payoff is cost, the maximax criteria becomes minimax and maximin becomes minimax.)
a. Maximin
b. Minimax
c. Hurwicz ( 0.40)
d. Equal likelihood
Answer:
a. Maximin = 19.0
b. Minimax = 17.6
c. Hurwicz ( 0.40) = Taiwan
d. Equal likelihood = Taiwan
Explanation:
Remember, we are told to: Note that since the payoff is cost, the maximax criteria becomes minimax and maximin becomes minimax
a) Maximin: Since the payoff is cost, we begin by determining the maximum cost for each alternative and then selecting the one which gives the minimum of these maximums. (minimax)
b) Minimax: Since the payoff is cost, we begin by determining the minimum cost for each alternative and then selecting the one which gives the maximum of these minimums. (maximin).
c) Hurwicz (0.40): In this method, we add and multiply each payoff value by alpha (0.4).
South Korea = 15.2 (0.4) + 21.7 (0.6) = 19.1 ( remember, in $ millions)
China = 17.6 (0.4) + 19.0 (0.6) = 18.44
Taiwan = 14.9 (0.4) + 19.2 (0.6) = 17.48
Poland = 13.8 (0.4) + 22.5 (0.6) = 19.02
Mexico = 12.5 (0.4) + 25.0 (0.6) = 20
From the values above we select the minimum outcome since the company is looking at saving cost. Which is Taiwan; having the lowest cost of $17.48 million.
d) Using the formula [tex]\frac{P_{1} +P_{2}+P_{3}...P_{n} }{n}[/tex] where P = payoffs value, n = number of events.
South Korea = 15.2 + 21.7 + 19.1 /3 = 18.66
China = 17.6 + 19.0 + 18.5 /3 = 18.36
Taiwan = 14.9 + 19.2 +17.1 /3 = 17.06
Poland = 13.8 + 22.5 + 16.8 /3 = 17.7
Mexico = 12.5 + 25.0 + 21.2 /3 = 19.56
Taiwan should be selected since it has the lowest cost of $17.06 million.
a. Fethe's Funny Hats is considering selling trademarked, orange-haired curly wigs for University of Tennessee football games. The purchase cost for a 2-year franchise to sell the wigs is $20,000. If demand is good (40% probability), then the net cash flows will be $27,000 per year for 2 years. If demand is bad (60% probability), then the net cash flows will be $6,000 per year for 2 years. Fethe's cost of capital is 13%. What is the expected NPV of the project?
b. If Fethe makes the investment today, then it will have the option to renew the franchise fee for 2 more years at the end of Year 2 for an additional payment of $20,000. In this case, the cash flows that occurred in Years 1 and 2 will be repeated (so if demand was good in Years 1 and 2, it will continue to be good in Years 3 and 4). Write out the decision tree. Note: The franchise fee payment at the end of Year 2 is known, so it should be discounted at the risk-free rate, which is 4%. Use decision-tree analysis to calculate the expected NPV.
Answer:
A) initial outlay = $20,000
expected cash flows = (40% x $27,000) + (60% x $6,000) = $14,400
NPV = -$20,000 + $14,400/1.13 + $14,400/1.13² = $4,020.68
B) Fethe acquires franchise $20,000
things go bad, NPV = -$20,000 + $6,000/1.13 + $6,000/1.13² = -$9,991.39. The project is abandoned after the first 2 years.things go well, NPV = -$20,000 + $27,000/1.13 + $27,000/1.13² = $25,038.77. The franchise is renewed for 2 more years.⇒ since the project continues, the present value of the cash flows are:
year 0 = -$20,000
year 1 = $27,000/1.13 = $23,893.81
year 2 = $27,000/1.13² - $20,000/1.04² = $5,482.03
year 3 = $27,000/1.13³ = $18,712.35
year 4 = $27,000/1.13⁴ = $16,559.61
NPV = $44,647.80
Can anyone help me match these into the correct category?
Answer:
see below
Explanation:
Hotel chain owner
Owns all the products of the groupOwns the brand nameOwns all the properties in the groupRetains all profits of the groupFranchise hotel owner
Pays a fee to use the brand name and productsOwns one or more independent unitsA hotel chain owner owns the entire business either as an individual or in a group. They have exclusive rights to the brand name of the business. They keep all the profits from the business but suffer all the losses.
A franchise is a business relationship where the business owner( the franchisor) grants a license to a third party ( the franchisee) to start and run a business similar to that of the franchisor. The franchisee gets permission to operates under the franchisor's brand name, colors, design, layout, and operating processes. They are allowed to trade franchisor's products and services.
Which of these is a placeholder in a document into which variable data is inserted during the process of a mail merge?
O data source
O main document
merge field
O none of the above
Answer:
ITS C merge field
Explanation:
HOPE THIS HELPS?
Answer:
c. merge field
Explanation:
Merge field - serves as a placeholder for the variable data that will be inserted into the main document during a mail merge procedure.
not Data source because its a list of information that is merged with a main document during a mail merge procedure.
not Main document because its a document used in a mail merge process with standard information that you personalize with recipient information.
Warrix Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.
Sales (3,000 units) $120,000
Variable expenses 90,000
Contribution margin 30,000
Fixed expenses 27,000
Net operating income $3,000
a. If sales increase to 3,100 units, net operating income would be closest to: ____________
b. If sales increase to 3,100 units, the breakeven point in units would:_____________
c. If sales increase to 3,100 units, the degree of operating leverage would:___________
Answer:
Results are below.
Explanation:
Giving the following information:
Sales (3,000 units) $120,000
Variable expenses 90,000
Contribution margin 30,000
Fixed expenses 27,000
Net operating income $3,000
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= 30,000/3,000= $10
a) Sales= 3,100
Contribution margin= 3,100*10= 31,000
Fixed expense= (27,000)
Net operating income= 4,000
b) To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 27,000/10
Break-even point in units= 2,700
c) Finally, the degree of operating leverage:
Degree of operating leverage= % change in income/ % change in sales
Degree of operating leverage= [(4,000-3,000)/3,000] / [(3,100-3,000) / 3,000]
Degree of operating leverage= 10
A 50-kilowatt gas turbine has an investment cost of $40,000. It costs another $14,000 for shipping, insurance, site preparation, fuel lines, and fuel storage tanks. The operation and maintenance expense for this turbine is $450 per year. Additionally, the hourly fuel expense for running the turbine is $7.50 per hour, and the turbine is expected to operate 3,000 hours each year. The cost of dismantling and disposing of the turbine at the end of its 8-year life is $8,000.
Required:
a. If the MARR is 15% per year, what is the annual equivalent life-cycle cost of the gas turbine?
b. What percent of annual life-cycle cost is related to fuel?
Answer:
The annual equivalent life-cycle cost (AW) of gas turbine = -$35,569.8
The percentage fuel cost = 63.25%
Explanation:
From the given information:
Let's start with the initial investment cost, which can be expressed by using the formula:
Initial investment cost = Investment cost of turbine + cost including shipping, insurance, site preparation, fuel lines, and fuel storage tanks.)
Initial investment cost = $40,000 + $14000
Initial investment cost = $54000
However, The annual fuel expense = hourly fuel expense for running turbine × total number of operating hour per year
The annual fuel expense = $7.50 × 3000
The annual fuel expense = $22,500
Therefore, the total operating cost per year = operating & maintenance cost per year + fuel expenses per year
the total operating cost per year = $(450 + 22500)
the total operating cost per year = $22,950
If the minimum acceptable rate of return MARR is 15%, then the number of years is 8 years
Therefore, the annual equivalent life-cycle cost (AC) of the gas turbine can be computed as follows:
AC(15%) = -54000 (A/P, 15%, 8) - $22950-$8000(A/F,15%,8)
where;
(A/P,15%,8) = annual worth factor of a present worth
(A/F,15%,8) = annual worth factor of future worth for 8 years and 15% interest rate.
If we use the discrete compounding table when i = 15%;
Value of (A/P,15%,8) = 0.229
Value of (A/F,15%,8) = 0.0729
∴
AC(15%) = -$54,000(0.2229) - $22,950 -$8000(0.0729)
AC(15%) = -$12,036.6 -$22950 -$583.2
AC(15%) = -$35,569.8
Therefore, the annual equivalent life-cycle cost (AW) of gas turbine = -$35,569.8
b.
The percentage of the annual life-cycle cost related to the fuel can be calculated by using the formula :
[tex]\mathbf{\% \ fuel \ cost = \dfrac{fuel \ cost \ per \ year}{total \ annual \ life \ cycle \ cost }\times 100\%}[/tex]
Replacing our values from above, we have:
[tex]\mathbf{\% \ fuel \ cost = \dfrac{\$22500}{\$35,569.8}\times 100\%}[/tex]
[tex]\mathbf{\% \ fuel \ cost = 0.6325\times 100\%}[/tex]
∴
The percentage fuel cost = 63.25%
Based on the given information, the annual equivalent life-cycle cost of the gas turbine is "$35,569.80," while the percent of the annual life-cycle cost is related to fuel is "65.87%."
This is based on the calculation below:
Given that: Initial investment cost => Investment cost of turbine + cost including shipping, insurance, site preparation, fuel lines, and fuel storage tanks.
Hence, we have the following:
Initial investment cost = $40,000 + $14,000;
=> Initial investment cost = $54,000.
On the other hand, The annual fuel expense = hourly fuel expense for running turbine × total number of operating hour per year;
Thus, we have the following:
The annual fuel expense = $7.50 × 3,000;
The annual fuel expense = $22,500.
Also, since, the total operating cost per year = operating & maintenance cost per year + fuel expenses per year;
We have the following:
the total operating cost per year = $(450 + 22,500);
the total operating cost per year = $22,950.
Therefore, given that the minimum acceptable rate of return MARR is 15%, then the number of years is 8 years.
Then, the annual equivalent life-cycle cost (AC) of the gas turbine is measured as:
AC (15%) = -54,000 (A/P, 15%, 8) - $22,950 - $8,000 (A/F,15%,8);
Here, we have the following details;
(A/P,15%,8) = annual worth factor of a present worth;
(A/F,15%,8) = annual worth factor of future worth for 8 years and 15% interest rate.
This, given that we use the discrete compounding table when i = 15%;
We have the following:
Value of (A/P,15%,8) = 0.229;
Value of (A/F,15%,8) = 0.0729.
AC (15%) = -$54,000 (0.2229) - $22,950 -$8,000 (0.0729);
AC(15%) = -$12,036.60 -$22,950 -$583.20;
AC(15%) = -$35,569.80.
Hence, the annual equivalent life-cycle cost (AW) of gas turbine = $35,569.80.
Similarly, the percent of the annual life-cycle cost is related to fuel is measured as = ($35,569.8 ÷ $54,000) × 100
=> 65.87%.
Hence, in this case, it is concluded that the lifecycle cost is essential when measuring the productivity of a project.
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Record the following transactions related to purchases for Horston’s Art Supplies using the general journal form provided below. Assume Horston’s uses a periodic inventory system. Omit transaction descriptions from entries.
Date Transaction
Sept. 1 Purchased $8,000 of merchandise on account, FOB destination, n/30.
3 Returned $1,000 of merchandise purchased on September 1 due to defects.
7 Purchased $1,500 of merchandise on account, terms FOB shipping point, 2/10, n/30.
Prepaid freight of $75 was added to the invoice.
14 Paid for the merchandise purchased on September 7, less discount.
20 Paid for merchandise purchased on September 1, less return.
Answer:
Sept. 1
Merchandise $8,000 (debit)
Accounts Payable $8,000 (credit)
Merchandise purchased on credit
Sept. 3
Accounts Payable $1,000 (debit)
Merchandise $1,000 (credit)
Merchandise Returned to Suppliers
Sept. 7
Merchandise $1,500 (debit)
Accounts Payable $1,500 (credit)
Merchandise purchased on credit
Sept. 14
Accounts Payable $1,500 (debit)
Cash $1,470 (credit)
Discount received $30 (credit)
Payment of amounts due and recognition of cash discount
Sept. 20
Accounts Payable $7,000 (debit)
Cash (credit)
Payments of Amount due
Explanation:
Journal Entries and their narrations have been prepared above.
Sandy Kupchack just graduated from State University with a bachelor’s degree in history. During her four years at the university, Sandy accumulated $10,000 in student loans. She asks for your help in determining the amount of the quarterly loan payment. She tells you that the loan must be paid back in five years and that the annual interest rate is 8%. Payments begin in three months.
Required:
Determine Sandy's quarterly loan payment.
Answer: $611.57 or $612 rounded to nearest dollar.
Explanation:
She would have to make a constant payment per quarter which makes it an annuity.
The $10,000 is the present value of the annuity.
The quarters remaining are = 5 years * 4 = 20 quarters
Quarterly interest = 8%/4 = 2%
10,000 = Annuity * Present Value of Annuity factor, 20 periods, 2%
10,000 = Annuity * 16.3514
Annuity = 10,000/16.3514
= $611.57
PinaCompany is preparing its master budget for 2017. Relevant data pertaining to its sales, production, and direct materials budgets are as follows.
Sales: Sales for the year are expected to total 1,200,000 units. Quarterly sales are 20%, 25%, 26%, and 29%, respectively. The sales price is expected to be $40 per unit for the first three quarters and $43 per unit beginning in the fourth quarter. Sales in the first quarter of 2018 are expected to be 15% higher than the budgeted sales for the first quarter of 2017.
Production: Management desires to maintain the ending finished goods inventories at 25% of the next quarter’s budgeted sales volume.
Direct materials: Each unit requires 2 pounds of raw materials at a cost of $10 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter’s production requirements. Assume the production requirements for first quarter of 2018 are 510,000 pounds.
Required:
Prepare the sales, production, and direct materials budgets by quarters for 2017.
Answer:
where is the question
Explanation:
External Influences on Consumer Behavior SaGa is a European fashion store chain that specializes in accessible, trendy clothes and accessories for men and women. Its target audience includes fashion-conscious young men and women, ages 16-30. After success in Europe, SaGa is getting ready to launch its flagship stores in five U.S. markets-New York, Los Angeles, Chicago, San Francisco, and Miami. Based on its product offerings, SaGa is targeting millennials (those born between 1982 and 2000, also called gen Y). As a group, millennials are open to making impulse purchases, and are socially connected as demonstrated by their use of Twitter to tweet about products and brands. Also, based on its "accessible" price for its fashion offerings, Saga is targeting middle-to upper-middle-class millennials. SaGa's advertising agency of record was excited about the impending launch campaign in the U.S. and its first-ever foray into the American market, which is heavily influenced by celebrity and pop culture. The agency was developing a campaign that focused on "usage occasion"—the ad would show a group of friends, in their 20s, getting together for a Friday night out in the city. A social occasion such as a night out with friends, combined with the setting of a city street lined with trendy clubs and restaurants, highlighted a perfect usage occasion for wearing fashionable clothes from SaGa. In the ad, the friends walk through a busy city street that has a party atmosphere, and pass several other people whose fashion sense is not as trendy as theirs. As they pass these people, the contrast between their group and the other people is highlighted by the use of muted, fading colors (for the other people) versus bright and pleasing colors (for the group of friends wearing SaGa). The agency was thus contrasting those who do not wear SaGa, a dissociative group, with those who do. Meanwhile, Raza, a high-end fashion store chain in Europe, is planning to enter the Japanese market. RaZa's promotional strategy decisions include highlighting the purchase situation in their ads by showing the exclusive boutique store atmosphere, and by using international supermodels that denoted an aspirational group for their target audience. RaZa targeted older and more affluent consumers compared to SaGa; their target market consisted of upper-class gen X'ers in Japan (those born between 1946 and 1976). RaZa's research revealed that the Japanese culture understood and respected high-end fashion. The consumer does not make purchase decisions in isolation. A number of external factors have been identified that may influence consumer decision-making, such as culture, subcultures, social class, reference groups, and situational determinants. Match the various external (or environmental) influences on consumer behavior to the relevant situations in SaGa's promotional decisions. Then match these external influences to examples found in RaZa's decisions. Born between 1965-1976 SaGa's Promotional Decisions External Influences Examples of External on Consumer Influence from Behavior RaZa's Promotional Decisions Affluent consumers Exclusive boutique-like shopping atmosphere Decision to launch in America, which represented a new culture, compared to their existing markets. Supermodels Target consumers: millennials Situational determinants Target consumers: middle and upper-middle class Social class Ads featured people that the target consumers identify with (associative groups), and also people that the target group does not belong to (dissociative groups). Subculture Ads featured a typical usage occasion for SaGa's product offerings - a Friday night out with friends. Japanese appreciation for high-end fashion Reference groups Culture
Part of question attached
Answer and Explanation:
Please find attached answer and explanation
Recording and Reporting Accrued Liabilities and Deferred Revenue with Discussion of Accrual Versus Cash Accounting
During its first year of operations, Walnut Company completed the following two transactions. The annual accounting period ends December 31.
A. Paid and recorded wages of $140,000 during Year 1; however, at the end of Year 1, three days' wages are unpaid and have not yet been recorded because the weekly payroll will not be paid to employees until January 6 of Year 2. Wages for the three days are $4,900.
B. Collected rent revenue of $4,800 on December 12 of Year 1 for office space that Walnut rented to another company. The rent collected was for 30 days from December 12 of Year 1 to January 10 of Year 2. Record the collection of rent on December 12.
Required:
1. With respect to wages, provide the adjusting entry required at the end of year 1 and the journal entry required on January 6 of year 2.
2. With respect to rent revenue, provide the journal entry for the collection of rent on December 10 and the adjusting entry required on December 31.
Answer:
Walnut Company
1. Adjusting Journal Entry:
December 31, Year 1:
Debit Wages Expense $4,900
Credit Wages Payable $4,900
To accrue unpaid wages at the end of the year.
General Journal Entry:
January 6, Year 2:
Debit Wages Payable $4,900
Credit Cash Account $4,900
To record the payment of accrued wages.
2. General Journal Entry:
December 12, Year 1:
Debit Cash Account $4,800
Credit Deferred Rent Revenue $4,800
To record the receipt of rent in advance.
Adjusting Journal Entry:
December 31, Year 1:
Debit Deferred Rent Revenue $3,200
Credit Rent Revenue $3,200
To adjust for rent revenue earned for 20 days.
Explanation:
The rent revenue of $4,800 according to the question is for 30 days. December 12 to December 31 has 20 days while January 1 to January 10 has 10 days. So the rent revenue for Year 1 is computed as $4,800 * 20/30 = $3,200 while the remaining balance will be for rent revenue in Year 1 ($4,800 * 10/30).
Given the following information about a fully amortizing loan, calculate the lender’s yield (rounded to the nearest tenth of a percent): loan amount: $166,950; term: 30 years; interest rate: 8%; monthly payment: $1,225.00; discount points: 2.
Answer:
c. 8.5%
Explanation:
Note: The following is the missing part. Other Closing Expenses: $3,611. A. 7.7% , B. 8.2%, C. 8.5%, D. 9.1%
Loan = $166,950
Rate = 8%
Life = 30 yrs
Period = 360
Installment = -1,225
Particulars Amount
Loan $166,950
Less: Discount points $3339
Less: Closing costs $3611
Net Borrowing $160,000
Now, we find the Effective borrowing Rate with the aid of MS Excel
Effective borrowing Rate = Rate(Nper, PMT, PV)
Effective borrowing Rate = Rate(360, -1225, 160000)
Effective borrowing Rate = 0.007044637(Monthly)
Annual Effective rate = 0.007044637 * 12
Annual Effective rate = 0.084535644
Annual Effective rate = 8.4535644%
Annual Effective rate = 8.5%
A lender is a person, a private or government institution, or a major bank that lends money to a person or a company with the anticipation of reimbursement. Repayment of every payment or cost will be included in the repayment.
The correct answer is c. 8.5%
The given information is:
Loan = $166,950
Rate = 8%
Life = 30 yrs
Period = 360
Installment = -1,225
Particulars Amount
Loan $166,950
Less: Discount points $3339
Less: Closing costs $3611
Net Borrowing $160,000
Calculation of the Effective borrowing Rate
Effective borrowing Rate = Rate(Nper, PMT, PV)
Effective borrowing Rate = Rate(360, -1225, 160000)
Effective borrowing Rate = 0.007044637(Monthly)
Annual Effective rate = [tex]0.007044637 \times 12[/tex]
Annual Effective rate = 0.084535644
Annual Effective rate = 8.4535644%
Annual Effective rate = 8.5%
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What can you conclude about a firm in the short run from its marginal product numbers as its output approaches capacity production
Answer: Law of Diminishing returns would apply
Explanation:
The Law of Diminishing returns is used to describe the phenomenon where after a certain level of input, the output produced no longer increases at an increasing rate but instead starts increasing at a decreasing rate.
For instance;
Labor Output
2 4
4 8
6 16
8 20
10 22
Notice how at first the output increased by 4 then by 8 but then started increasing by 4 and then by 2. This is the Law of Diminishing Marginal returns and a reality that normally faces a firm in the short run as its output approaches capacity production.
The shoe buyer plans to promote flip-flop sandals at $24.99. The buyer needs to purchase10,000 flip flops for the event. 6,000 flip-flop sandals have been purchased at a cost of $11.50. The planned markup for the event is 59.0%. What will be the average cost of the remaining sandals?
Answer:
$22.04
Explanation:
Sales price per sandal = $24.99
Sales price of 10,000 sandals = $24.99*10,000 = $249,900
Markup percentage = 59%
Cost of 10,000 sandals = $249,900 / 1 + 59%
Cost of 10,000 sandals = $249,900 / 1.59
Cost of 10,000 sandals = $157169.81
Cost of 10,000 sandals = $157,169.81
Less: Cost of 6000 sandals = $69,000 ($11.5*6,000)
Cost of the remaining 4,000 $88,169.81
Average cost of the remaining sandals = $88,169.81/4,000 sandals
Average cost of the remaining sandals = $22.0424525
Average cost of the remaining sandals = $22.04