Explanation:
I am not understanding your question
Distribution Corporation collects 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the second month following sale. Budgeted sales for the upcoming four months are:
The amount of cash that will be collected in July is budgeted to be
A. $66.500
B. $183,000
C. $171,000
D. $116, 500
Answer:
B. $183,000
Explanation:
Calculation to determine The amount of cash that will be collected in July is budgeted to be
Budgeted collection in July = July sales (190,000*35%) + June sales (210,000*45%) + May sales (110,000*20%)
Budgeted collection in July =$66,500 +$94,500 + $22,000
Budgeted collection in July=$183,000
Therefore The amount of cash that will be collected in July is budgeted to be $183,000
Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 0.3%, E(2r 1) = 1.3%, E(3r1) = 9.4%, E(4r1) = 9.75%. Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year maturity Treasury securities. (Round your answers to 3 decimal places. (e.g., 32.161))
Answer:
Year 1 long term rate is the same as first year 1 year rate = 0.3%
Year 2
= √[(1 + year 1 rate%) * (1 + year 2 rate%)] - 1
= √[(1 + 0.3%) * (1 + 1.3%)] - 1
= 0.799%
Year 3
= ³√[(1 + year 1 rate%) * (1 + year 2 rate%) * (1 + year 3 rate%)] - 1
= ³√[(1 + 0.3%) * (1 + 1.3%) * (1 * 9.4)] - 1
= 3.588%
Year 4
= ⁴√[(1 + year 1 rate%) * (1 + year 2 rate%) * (1 + year 3 rate%) * (1 + 4 year rate)] - 1
= ⁴√[(1 + 0.3%) * (1 + 1.3%) * (1 * 9.4) * (1 + 9.75%)] - 1
= 5.095%
Gore organized on January 2, 2021, had pretax accounting income of $7,100,000 and taxable income of $10,160,000 for the year ended December 31, 2021. The 2021 tax rate was 25%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows:
2022 $1,020,000 30%
2023 510,000 30%
2024 510,000 30%
2025 1,020,000 35%
Required:
Prepare one compound journal entry to record Gore's provision for taxes for the year 2021.
Answer:
Date Account title Debit Credit
12/31/2021 Income tax expense $3,060,000
Deferred tax asset $ 969,000
Income tax payable $4,029,000
Explanation:
2021 Income tax expense from warranty costs:
= Taxable income - Pretax accounting income
= 10,160,000 - 7,100,000
= $3,060,000
Tax on the warranty payments will be treated as deferred tax assets so the total is:
= (1,020,000 * 30%) + (510,000 * 30%) + (510,000 * 30%) + (1,020,000 * 35%)
= $969,000
Isabella wants to gather competitive intelligence (CI) on toy manufacturers before she launches her toy company, which has developed remote-controlled dinosaurs. Her dinosaurs are designed for children over 6 years old. Isabella plans to check some noncomputer sources. She could use all of the following sources EXCEPT _______.
a. Ci consultants
b. industry experts
c. suppliers
d. scanner research
Answer:
d. scanner research
Explanation:
The scanner research includes the data analyze that collected via scanning the devices and same is applied at the time of purchase. It is the type of the computer based research and she wants to check that non-computer sources
So the other options would not be considered as they are doing for the research purpose
But the above option is not considered for the same
Therefore the option d is correct
Martinson Inc. manufactures industrial-sized landscaping trailers and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 40,000 units Budgeted machine-hours 10,000 hours Budgeted variable manufacturing overhead costs for 40,000 units $310,000 Actual output units produced 36,500 units Actual machine-hours used 14,600 hours Actual variable manufacturing overhead costs $350,400 What is the budgeted variable overhead cost rate per output unit
Answer:
Overhead rate per unit= $124
Explanation:
Giving the following information:
Budgeted output units 40,000 units
Budgeted machine-hours 10,000 hours
Budgeted variable manufacturing overhead costs for 40,000 units $310,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 310,000 / 10,000
Predetermined manufacturing overhead rate= $31 per machine hour
Now, for each unit:
Machine hours per unit= 40,000/10,000= 4
Overhead rate per unit= 31*4
Overhead rate per unit= $124
Finerly Corporation sells cosmetics through a network of independent distributors. Finerly shipped cosmetics to its distributors and is considering whether it should record $300,000 of revenue upon shipment of a new line of cosmetics. Finerly expects the distributors to be able to sell the cosmetics, but is uncertain because it has little experience with selling cosmetics of this type. Finerly is committed to accepting the cosmetics back from the distributors if the cosmetics are not sold. How much revenue should Finerly recognize upon delivery to its distributors?
Answer: $0
Explanation:
When there is an expectation of reversal of the goods back to the company due to factors arising from a delay in the delivery of the goods or other factors that could not be controlled, the revenue recognized should be $0.
In this scenario, Finerly is uncertain about the ability of the goods to be sold by the distributors and is committed to accepting the cosmetics should they not sell.
As they have little experience which means that they will be unable to control much unforeseen factors, there is an expectation of reversal so revenue should be recognized at $0 on delivery. Revenue will only be recognized after sales.
A man wants to help provide a college education for his young daughter. He can afford to invest $1500/yr for the next 5 years, beginning on the girl 's 5th birthday. He wishes to give his daughter $10,000 on her 18th, 19th , 20th, and 21 st birthdays, for a total of $40,000. Assuming 6% interest, what uniform annual investment will he have to make on the girl's 9th through 17th birthdays?
Answer:
$1,919.69
Explanation:
when the daughter is 9 years old, total savings = $1,500 x 5.6371 (FVIFA, 6%, 5 periods) = $8,455.65
first 5 payments:
birthdays = 5, 6, 7, 8, 9
the present value of the $40,000 that he needs for her daughter's college = $10,000 x 3.4651 (PVIFA, 6%, 4 periods) = $34,651
the FV until the 17th birthday = $8,455.65 x 1.06⁸ = $15,650.82
he needs to save = $34,651 - $15,650.82 = $19,000.18
value of annual deposits = $19,000.18 / 9.8975 (FVIFA, 6%, 8 peridos) = $1,919.69
f an asset was purchased on January 1, Year 1, for $140,000 with an estimated life of 5 years, what is the accumulated depreciation at December 31, Year 4
Answer:
The answer is "[tex]\$ 112,000[/tex]"
Explanation:
[tex]\text{Straight-line method depreciation}=\frac{Asset\ costs}{Utility \ of \ life}[/tex]
[tex]= \frac{\$ 140,000}{5}\\\\= \$ 28,000[/tex]
On 31 December, accumulated depreciation:
[tex]= 4 \ years \times \$ 28,000\\\\=\$ 112,000[/tex]
On January 1, a company issued and sold a $440,000, 6%, 10-year bond payable, and received proceeds of $434,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the first interest payment is:
Answer:
The carrying value of the bonds immediately after the first interest payment is $434,300.
Explanation:
Face value of the bond = $440,000
Proceeds from bond issue = $434,000
Discount on bond payable = Face value of the bond - Proceeds from bond issue = $440,000 - $434,000 = $6,000
Total number of seminual = Number of years of bond maturity * Number of semiannual in a year = 10 * 2 = 20
Discount amortizaton per semiannual = Discount on bond payable / Total number of seminual = $6,000 / 20 = $300
Carrying value after first interest payment = Proceeds from bond issue + Discount amortizaton per semiannual = $434,000 + $300 = $434,300
Therefore, the carrying value of the bonds immediately after the first interest payment is $434,300.
Locked-In Real Estate (LIRE) is preparing for their Initial Public Equity Offering (IPO). With its holdings consisting of rent controlled apartments, and no plans for expanding, LIRE plans to payout all of its earnings as dividends. These dividends amount to $7.50 per share, forever. If the expected rate of return is 12%, what is the stock price of LIRE
Answer: $62.50
Explanation:
The stock price of Locked-In Real Estate (LIRE) will be calculated thus:
Stock price = D /ke - g
where,
D = Dividend paid per share = $7.50
Ke = expected rate of return on equity = 12% = 0.12
g is growth rate of dividend = 0
Stock price = $7.50/0.12
Stock price = $62.5
Therefore, the stock price is $62.50
Becker and Murphy wrote their article before DVR systems and online streaming services became popular. Nowadays, ads on television are avoidable (to a degree), just like ads in a newspaper. What impact do you think technology has on the types of ads you see on TV?
Answer:
Currently, most people can simply decide to skip ads. When you hire streaming services like Netflix or Disney+, one of the advantages is that there are no ads. People now watch the ads that they like and want to see, unless you are stuck watching the Superbowl or some type of live event. This adds pressure to marketing campaigns since ads need to attract viewers.
Explanation:
a diamond poem for economy
here is the poem! hope you like it :)
Explanation:
There are some economic ways to live
to prevent monitary disaster
try being thoughtful when you try to give
you will always grow happier faster
conserve and waste not for it shall have cost
money you save is the money you earned
it is hard to get back what you have lost
show every one the knowledge you have learned
try to buy what you need and nothing more
being over indulgence is not good
do not hang out at the department store
would try to go to the park if I could
it's very good for ecnomy to spend
but all the wastifulness has to end
There are two reasons that an industry prefers self-regulation to government regulation: cost and flexibility. True False
Answer:
True.
Explanation:
In general, the vast majority of industrial entrepreneurs prefer self-regulation over government regulation. This is so due to two fundamental factors: on the one hand, the maintenance costs of the government regulatory system are paid for through taxes, which means that the higher the regulations, the higher the taxes that each company must pay, while the self-regulation should not spend. more money than that of the control systems, without allocating sums of money to the government; and on the other, flexibility, that is, the possibility of adapting the processes, systems and needs of each company to the necessary regulations, being able to optimize costs and processes.
Macon Publishing reports the following information about resources. At the beginning of the year, Macon estimated it would spend $39,720 for setups and $21,000 for clerical. The unused resource capacity for setups for Macon Publishing is:
Answer:
$10,000
Explanation:
Calculation to determine what The unused resource capacity for setups for Macon Publishing is:
Using this formula
Unused resource capacity =Clerical resources used -[(Clerical rate per page*Pages typed)
Let plug in the formula
Unused resource capacity=$20,000 – ($20*500)
Unused resource capacity=$20,000-$10,000
Unused resource capacity = $10,000
Therefore The unused resource capacity for setups for Macon Publishing is:$10,000
More Hits Company manufactures aluminum baseball bats that it sells to university athletic departments. It has developed the following per unit standard costs for 2019 for each baseball bat:
Direct Materials Direct Labor Manufacturing Overhead
Standard Quantity 2 Pounds (Aluminum) 1/2 hour 1/2 hour
Standard Price $4.00 $10.00 $6.00
Unit Standard Cost $8.00 $5.00 $3.00
In 2019, the company planned to produce 120,000 baseball bats at a level of 60,000 hours of direct labor. Actual results for 2019 are presented below:
1. Direct materials purchases were 246,000 pounds of aluminum which cost $1,020,900.
2. Direct materials used were 220,000 pounds of aluminum.
3. Direct labor costs were $575,260 for 58,700 direct labor hours actually worked.
4. Total manufacturing overhead was $352,000.
5. Actual production was 114,000 baseball bats.
Compute the following variances and identify whether the variance is favorable or unfavorable:
1. Direct Materials Price
2. Direct Materials Quantity
3. Direct Labor Price
4. Direct Labor Quantity
5. Total Overhead Variances
Prepare the journal entries to record the transactions and events in 2019.
Answer: See explanation
Explanation:
AP = 4.15
SP = 4.0
SQ = 114000 × 2 = 228000
1. Direct Materials Price
= (AQ × AP) - (AQ × SP)
= (246000 × 4.15) - (246000 × 4.0)
= 1020900 - 984000
= 369000 U
2. Direct Materials Quantity
= (AQ × SP) - (SQ × SP)
where SQ = 114000 × 2 = 228000
= (220000 × 4.0) - (228000 × 4.0)
= 880000 - 912000
= 32000 F
3. Direct Labor Price
= (AH × AR) - (AH × SR)
= (58700 × 9.8) - (58700 × 10)
= 575260 - 587000
= 11740
4. Direct Labor Quantity
= (AH × SR) - (SH × SR)
where, SH = 114000 × ½ = 57000
= (58700 × 10) - (57000 × 10)
= 587000 - 570000
= 17000 U
5. Total Overhead Variances
= 352000 - (57000 × 6)
= 352000 - 342000
= 10000 Unfavorable
Check attachment for further details
A perfectly elastic supply curve is: Group of answer choices upward sloping to the right. vertical. horizontal. downward sloping to the left.
Answer:
vertical
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
The market for the fast car with so much horsepower that handling becomes an issue is decreasing. People are more interested in buying SUVs and pickups. As a result, General Motors is stopping production of its Camaro, a car that has had limited sales recently. Since the Camaro can no longer generate enough cash to sustain its manufacture, the BCG portfolio would classify it as a:
Answer:
Dog.
Explanation:
In 1970, Bruce D. Henderson developed and created a growth-share matrix for the Boston Consulting Group (BCG). The Boston Consulting Group (BCG) growth-share matrix is a tool used for analyzing and planning product lines in a business unit. It makes use of a graphical representation of a company's product line and services to analyze and make long-term strategic plans on which to invest more on or sell off.
Generally, products are divided into four (4) main categories in the BCG growth-share matrix;
1. Dogs.
2. Stars.
3. Question marks.
4. Cash cows.
A dog refers to a product or business unit that has a very low growth rate or market share and as such generates insufficient amount of revenues.
In this scenario, Camaro isn't able to generate sufficient (enough) cash to sustain its manufacturing or production process, the Boston Consulting Group (BCG) portfolio would classify it as a dog.
4. Know the market trends of products that are in demand not
only within the local market but also in the international market.
Answer:
oligopoly
Explanation:
it is unique the market is blocked not easy to enter
The seaport town of New Monopoly has become extremely popular with shipping companies due to its superior location. The port has become so congested that ships must wait hours every day just to dock. The mayor of New Monopoly realizes that the congestion at the port costs the shipping companies and his town money. This is an example of marginal analysis. a private good. market failure. a recession.
Answer:
Market failure.
Explanation:
In this scenario, the port became so congested such that ships now have to wait hours queing every day just to dock. The mayor of New Monopoly realizes that the congestion at the port costs the shipping companies and his town money. This is an example of market failure.
A market failure can be defined as a situation in which the market fails to produce an efficient level of productivity or output that is required to meet demand.
This ultimately implies that, a market failure arises when there is inefficiency in the distribution or allocation of goods and services in a free market. Thus, the demand of the consumer of these goods and services are not being met with the level of supply (output) required i.e the forces of demand and supply are not efficient in producing the level of output required by the economy.
Some of the causes of market failure are imperfect information, monopoly, oligopoly, externalities etc.
The market price of a security is $46. Its expected rate of return is 10%. The risk-free rate is 4%, and the market risk premium is 9%. What will the market price of the security be if its beta doubles (and all other variables remain unchanged)
Answer:
The new Market price =$28.75
Explanation:
According to the Capital Asset Pricing Model CAPM, we have that
Expected return= risk free rate+(beta X market risk premium)
10=4+ beta x 9
= 10- 4 = beta x 9
beta =6 /9 =0.666
IF beta doubles with other variables constant
Expected return= risk free rate+(betaXmarket risk premium)
Beta= 0.666 x2 =1.3333
Expected return = 4+ 1.333 x 9
Expected return 4+ 12=16%
Price = Perpertual Dividend /Expected return
where Current Share price =$46
Dividend = $46 x 10%=4.6
The new Market price = Perpetual dividend/New Required return
= 4.6/16% =$28.75
So the new Market price =$28.75
You are reviewing a company's general ledger. It shows consecutive balances of $52,111 and $60,564 for the Accounts Receivable account. Without looking at the transaction column, what was the transaction
Answer:
Accounts Receivable $8453 (debit)
Sales $8453( credit)
Explanation:
The consecutive balances are $52,111 and $60,564 which means that the Accounts Receivable has increased from $52,111 to $60,564.
Increase in Accounts Receivable= $60,564 - $52,111
=$8453
The Accounts Receivable balance increases when sales are made on accounts with certain given terms etc.
So the transaction would be
Accounts Receivable $8453 (debit)
Sales $8453( credit)
The debit in accounts receivable shows that the balance has increased . Also the credit in Sales accounts show that the sales have increased.
A constant return of scale indicates that a firm is producing its ______ at a ______ ATC, which also shows that the firm is _______.
Answer:
The question is incomplete, the options are missing. The options are the following:
A) input, constant, lack of competitiveness
B) output, lower, doing well
C) output, constant, doing well
D) output, higher, doing well
E) input, lower, lack of competitiveness
And the correct answer is the option C: output, constant, doing well.
Explanation:
To begin with, in the microeconomics theory when it comes to the term of "constant return of scale" it refers to the situation in where a company is producing its output at a constant average total cost indicating that is doing well due to the fact that the costs are still covered by the earings that the company is having so that means that it could still keep on working for the next period. The term of return of scale focus on the changes donde in the inputs and how that affects the outputs and the earning regarding that base.
On 1/29, General Electric bought supplies in the amount of $1,500. What account is debited and what account is credited in the required journal entry for General Electric on 1/29? (Select ALL that apply)
Answer: Debit Supplies
Credit Cash
Credit Accounts payable.
Explanation:
The journal entry is an act of making records of the transactions in an organization which shows the debit and credit balances of the company.
Based on the information given, since General Electric bought supplies in the amount of $1,500, the journal entry will be:
Debit Supply $1500
Credit Cash / Accounts Payable $1500
As of Dec. 31, 2013, a company had current assets of $600,000 and current liabilities of $300,000. Sales of the company are expected to increase by 10 percent for each of the next two years. If all current assets and current liability accounts increase proportionately with sales, what would be the projected current ratio of the company on Dec. 31, 2015
Answer:
2.00
Explanation:
Calculation to determine what would be the projected current ratio of the company on Dec. 31, 2015
Using this formula
Current ratio =Current assets/ Current liabilities
Let plug in the formula
Current ratio =$600,000 /$300,000
Current ratio =2.00
Therefore the projected current ratio of the company on Dec. 31, 2015 is 2.00
McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three designs, called designs K1, K2, and K3, are under consideration. No matter which design is used, daily production of sandwiches at a typical McBurger restaurant is for 500 sandwiches. A sandwich costs $1.20 to produce. Non-defective sandwiches sell, on the average, for $2.50 per sandwich. Defective sandwiches cannot be sold and are scrapped.
The goal is to choose a design that maximizes the expected profit at a typical restaurant over a 300-day period. Designs K1, K2, and K3 cost $100,000, $130,000, and $150,000, respectively. Under design K1, there is a .80 chance that 90 out of each 100 sandwiches are non-defective and a .20 chance that 70 out of each 100 sandwiches are non-defective. Under design K2, there is a .85 chance that 90 out of each 100 sandwiches are non-defective and a .15 chance that 75 out of each 100 sandwiches are non-defective. Under design K3, there is a .90 chance that 95 out of each 100 sandwiches are non-defective and a .10 chance that 80 out of each 100 sandwiches are non-defective.
The expected profit level of design K1 is $____.
The expected Profit leve of design K2 is___.The expected profit level of design k3 is___.
Answer:
McBurger, Inc.
The expected profit level of design K1 is $_42,500__.
The expected Profit level of design K2 is_19,063__.
The expected profit level of design k3 is_20,625__.
Explanation:
a) Data and Calculations:
Daily production units at a typical McBurger restaurant = 500 sandwiches
Yearly production units =150,000 (500 * 300)
Unit production cost of a sandwich = $1.20
Selling price of non-defective sandwich = $2.50
Design K1 Design K2 Design K3
Calculation of non-defective units:
0.80 * 90/100 * 150,000 108,000
0.20 * 70/100 * 150,000 21,000
0.85 * 90/100 * 150,000 114,750
0.15 * 75/100 * 150,000 16,875
0.90 * 95/100 * 150,000 128,250
0.10 * 80/100 * 150,000 12,000
129,000 131,625 140,250
Sales Revenue $322,500 $329,063 $350,625
Production cost (180,000) (180,000) (180,000)
Cost of design (100,000) (130,000) (150,000)
Expected profit $42,500 $19,063 $20,625
Sales revenue = Non-defective sandwiches * $2.50
Product cost = Production units * $1.20
Expected profit = Sales Revenue - (Product cost + Design cost)
An electronics firm produces smart phones for sale to the worldwide market. One of the most crucial process-related competitive operational priorities for this firm is:
Answer:
Flexibility
Explanation:
Given that there are three types of process-related competitive priorities in which firms utilize to remain competitive in the market. These processes include:
1. flexibility
2. Innovation
3. sustainability
Flexibility in this situation is mostly referred to as adaptation to market changes. Given that this is a technological market, and it is often bound to quick changes and dynamism, especially in terms of customer taste and preferences, huge competitors, and shorter span of the technological product,
Hence, for this electronic company making smartphones, one of the most crucial process-related competitive operational priorities for the firm is Flexibility. This is due to various competitors coming with new models in short stints.
The following is selected financial information for Osmond Dental Laboratories for 2021 and 2022: 2021 2022 Retained earnings, January 1 $ 53,000 ? Net income 40,000 45,000 Dividends 12,000 25,000 Common stock 78,000 ? Osmond issued 3,000 shares of additional common stock in 2022 for $22,000. There were no other stock transactions. Prepare a statement of stockholders' equity for the year ended December 31, 2022. (Amounts to be deducted should be indicated with minus sign.)
Answer:
Osmond Dental Laboratories
Statement of Stockholders' Equity:
2022
Common stock $90,000
Retained earnings, December 31 101,000
Stockholders' equity $191,000
Explanation:
a) Data and Calculations:
Osmond Dental Laboratories for 2021 and 2022:
2021 2022
Retained earnings, January 1 $ 53,000 ?
Net income 40,000 45,000
Dividends 12,000 25,000
Common stock 78,000 ?
Analysis:
Cash $22,000 Common stock $22,000
Retained earnings, January 1 $ 53,000 81,000
Net income 40,000 45,000
Dividends -12,000 -25,000
Retained earnings, December 31 $ 81,000 $101,000
Common stock on December 31 = $90,000 ($78,000 + $22,000)
Statement of Stockholders' Equity:
Osmond Dental Laboratories for 2021 and 2022:
2021 2022
Common stock $78,000 $90,000
Retained earnings, December 31 81,000 101,000
Stockholders' equity $159,000 $191,000
Explain how mixed costs are related to both fixed and variable costs. A. Mixed costs have a fixed portion that is a cost per unit of cost driver activity. Mixed costs also have a variable portion that is usually a cost per time period. B. Mixed costs are the sum of the fixed and variable costs that are related to equipment costs. These mixed costs are a form of committed costs during the production phase. C. A mixed cost is the sum of fixed costs and the portion of variable costs that are related to salaries and wages. These mixed costs are discretionary costs that easily fluctuate and must therefore be kept separate during a production phase. D. A mixed cost has a fixed portion that is usually a cost per time period. A mixed cost also has a variable portion that is a cost per unit of cost driver activity.
Answer:
D. A mixed cost has a fixed portion that is usually a cost per time period. A mixed cost also has a variable portion that is a cost per unit of cost driver activity.
Explanation:
As we know that
The variable cost is the cost that can change when the level of production increase or decrease
The fixed cost is the cost that remains fixed whether the production level increased or not
ANd, the mixed cost includes some part of the variable cost and some part of the fixed cost
So as per the given options, the option D is correct as the mixed cost involved the fixed portion that could be cost per the time. And, it involved the variable portion i.e cost per unit with respect to the cost driver activity
Sam's Cat Hotel operates 51 weeks per year, 6 days per week. It purchases kitty litter for $6.50 per bag. The following information is available about these bags: ≻Demand = 70 bags/week ≻Order cost = $75/order ≻Annual holding cost = 22 percent of cost ≻Desired cycle-service level=99 percent ≻Lead time = 1 week(s) (6 working days) ≻Standard deviation of weekly demand = 7 bags ≻Current on-hand inventory is 200 bags, with no open orders or backorders. Suppose that Sam's Cat Hotel uses a P system. The average daily demand, d, is 12 bags (70/6), and the standard deviation of daily demand, Standard Deviation of Weekly Demand Days per Week, is 2.858 bags.
Current on-hand inventory is 320 bags, with no open orders or backorders.
Required:
a. What is the EOQ? What would the average time between orders (in weeks)?
b. What should R be?
c. An inventory withdraw of 10 bags was just made. Is it time to reorder?
d. The store currently uses a lot size of 500 bags (i.e., Q=500). What is the annual holding cost of this policy? Annual ordering cost? Without calculating the EOQ, how can you conclude lot size is too large?
e. What would be the annual cost saved by shifting from the 500-bag lot size to the EOQ?
Answer: B
Explanation:
Fact Pattern 28-2 Adam, a director of Beta Computer Company, learns that a Beta engineer has developed a new, significantly faster computer chip. Adam buys Beta stock and tells his friend Cathy, who also buys Beta stock. When the new chip is announced three weeks later, Adam and Cathy sell their stock for a big profit.Refer to Fact Pattern 28-2. Regarding Adam's profits on the purchase and sale of Beta stock, under Section l6(b) of the Securities Exchange Act of 1934 Beta may recapturea) 10 percent of Adam's profitsb) half of Adam's profitsc) all of Adam's profits.d) none of the above.
Answer:
C. All of Adam's profits
Explanation:
If Adam is found guilty of using insider information from the company Beta Computer to gain profits by buying and selling stock of the company. He can be sued by the other security holders and will be held liable to pay all of his profits made with that trade. under the Section 16{b} of the Securities Exchange Act of 1934.