Answer:
Price ceiling creates black markets
Price ceiling is when the government or an agency of the government sets the maximum price of a good or service. Price ceiling is binding if it is set below equilibrium price.
When a binding price floor is established, producers would earn less profits and as a result they would stop selling their products in the free markets. This would lead to scarcity and a result a black market can emerge. Goods would be sold at a higher price in the black markets than it would in the free markets.
So, black markets can arise as a result of price ceiling and the need of producers to earn higher profits
b. During the war, when there was a rationing of meat. Farmers declared less animal births to authorities and sold the undeclared livestock in the black market.
Also, in less developed countries e.g. Nigeria, when there is scarcity of fuel. Black markets arise where fuel are sold for higher prices
Explanation:
You own a Home that Cost $200,000. What part of the Accounting Equation would this be?
Answer:
Assets
Explanation:
You stop at a SUBWAY to get a sandwich for lunch and you notice that they now have TCBY yogurt. This is an example of a:______
a. co-branded establishment.
b. franchise.
c. small business.
d. dual-sponsored business.
e. dual-branded franchise.
Answer:
dual-branded franchise.
Explanation:
A franchise can be defined as a contractual arrangement between a parent (established) company and another which primarily, grants permission or license to the new firm to operate a business under an established name and in accordance with specific rules, terms and conditions.
Additionally, a dual-branded franchise refers to a type of franchise in which two or more business franchise set up their shops or outlets very close to each other or within the same premises. Thus, dual-branded franchises usually share some things in common such as shop, dining area etc.
In this scenario, you stop at a SUBWAY to get a sandwich for lunch and noticed that they now have TCBY yogurt. Therefore, this is an example of a dual-branded franchise.
The main advantage of a dual-branded franchise is to boost sales and give customers a complete shopping experience, satisfaction or value.
Suppose, you own a screen-printing business and you enter into a contract with a local school to print 50 orange t-shirts with the school name and their mascot on the front. Each shirt costs $10. Before the shirts are delivered, the school breaches the contract. You are now stuck with 50 shirts you cannot resell because no one wants t-shirts with someone else's school name and mascot on the front. What amount can you sue for if you sue for damages
Answer: $500
Explanation:
Based on the scenario in the question, there's a breach of contract as the shirts aren't delivered and there are 50 t-shirts which cost $10 each that no one law is willing to buy because it has a school name and their mascot on the front.
Here, the maker of the shirt can sue for damages and since there's no resale, the amount to be sued for damages will be the price of each shirt multiplied by the total number of shirt. This will be:
= $10 × 50
= $500
An investment offers $9,200 per year for 17 years, with the first payment occurring 1 year from now. Assume the required return is 12 percent. Requirement 1: What is the value of the investment today? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 2: What would the value be if the payments occurred for 42 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 3: What would the value be if the payments occurred for 77 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 4: What would the value be if the payments occurred forever? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $
Answer:
1.
Present value = $65500.60053 rounded off to $65500.60
2.
Present value = $76009.84174 rounded off to $76009.84
3.
Present value = $76654.22671 rounded off to $76654.23
4.
PV of perpetuity = $76666.66667 rounded off to $76666.67
Explanation:
The payments from the investment can be classified as being an ordinary annuity as the payments made by the investment offer are of constant amount and occur at the end of the period, occur after equal intervals of time and are for a defined and finite time period except for the payments made in case of requirement 4. The formula to calculate the present value of annuity that will be used in requirement 1, 2 and 3 is attached.
1.
Present value = 9200 * [(1 - (1 + 0.12)^-17) / 0.12]
Present value = $65500.60053 rounded off to $65500.60
2.
Present value = 9200 * [(1 - (1 + 0.12)^-42) / 0.12]
Present value = $76009.84174 rounded off to $76009.84
3.
Present value = 9200 * [(1 - (1 + 0.12)^-77) / 0.12]
Present value = $76654.22671 rounded off to $76654.23
4.
If the payments occur for an infinite period of time, they can be classified as a perpetuity.
The formula to calculate the present value of perpetuity is as follows,
PV of perpetuity = Cash Flow / r
Where,
r is the required rate of return or discount rate
PV of perpetuity = 9200 / 0.12
PV of perpetuity = $76666.66667 rounded off to $76666.67
You lose your job and as a result, you buy fewer mystery books. This shows that you consider mystery books to be a/an a. inferior good. b. complementary good c. luxury good d. normal good.
Answer:
You lose your job and as a result, you buy fewer mystery books. This shows that you consider mystery books to be a/an
c. luxury good
Explanation:
The demand for a luxury good increases with increasing income. A higher proportion of the income is spent on the good than under normal circumstances. An inferior good is one whose demand, on the other hand, drops when income rises. A normal good is a necessity unlike a luxury good. A complementary good is demanded with its complement because the two goods go together. Bread and butter are complementary goods.
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. a. Calculate the total variance for an increase of 0.10 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.) b. Calculate the total variance for an increase of 2.62% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Answer: Check attachment
Explanation:
a. Calculate the total variance for an increase of 0.10 in its beta.
The answer here is 0.2700
b. Calculate the total variance for an increase of 2.62% in its residual standard deviation.
The answer is 0.2664
Check the attachment for more explanation
The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities is:
Answer:
Acid-test ratio
Explanation:
Acid-test ratio I finance can also be regarded as quick ratio, it gives the measurement of how an organization can utilize her quick asset as well as cash to settle her liabilities at at that current period.
It can be calculated theoretically using this expresion;
Quick ratio= (Current Asset- Inventory)/Current Liabilities
It should be noted that acid-test ratio gives The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities. It enables to know shot term liquidity of a particular company.
A 10 percent three-year wage increase is provided as a 2 percent increase in the first year, 3 percent in the second year, and 5 percent in the third year. This is an example of a ________ contract.
Answer:
Back-loaded
Explanation:
A back-loaded contract can be defined as a contractual arrangement between two or more parties, in which higher costs are levied or higher benefits are accrued to a project towards the end of its term (duration) as against lower costs or benefits at its beginning.
This ultimately implies that, a back-loaded contract allows lower wage adjustment in the first year with a consequent higher increase towards the end of a contract.
In this scenario, a 10 percent three-year wage increase is provided as a 2 percent increase in the first year, 3 percent in the second year, and 5 percent in the third year. This is an example of a back-loaded contract.
11. Suppose domestically-produced apples have a price of $1.50 per pound and domestically-produced oranges have a price of $2.50. What combined contribution does domestic production of 2,000 pounds of apples and 1,000 pounds of oranges made to nominal GDP
Answer: $5500
Explanation:
Nominal GDP is when th current market prices of goods is being used to calculate the value of every goods and services for that particular country.
To solve this, we have to multiply the quantity of the goods by their prices. This will be:
= (2000 × $1.50) + (1000 × $2.50)
= $3000 + $2500
= $5500
Jasper Corp. has a selling price of $44, and variable costs of $25 per unit. When 14,600 units are sold, profits equaled $133,000. How many units must be sold to break-even?
A. 19,000
B. 12,000
C. 14,333
D. 5,000
Answer:
Break-even point in units= 7,600
Explanation:
Giving the following information:
Selling price= $44
Unitary variable cost= $25
When 14,600 units are sold, profits equaled $133,000.
First, we need to calculate the total fixed costs:
Fixed costs= Total contribution margin - net income
Fixed costs= 14,600*(44 - 25) - 133,000
Fixed costs= $144,400
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= 144,400 / (44 - 25)
Break-even point in units= 7,600
Select the correct answer. Which description is that of a vertical stroke? A. a stroke drawn to represent a letter part that is perpendicular to the guidelines B. a stroke drawn to represent a letter part that is diagonal to the guidelines C. a stroke drawn to represent a letter part that is parallel to the guidelines D. a stroke drawn to represent a letter part that is at an angle of 68 degrees to the guidelines
Answer:
A
Explanation:
Once a company has reached the decline phase, it should just go out of business and be done with it.
False
True
Answer:
Hmm.
Explanation:
False.
Sometimes, a company can make a huge comeback even after a major decline.
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was______ %
and economic growth was______ %. (Give your answers to one decimal place.)
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was________ %
and economic growth was______ %. (Give your answers to one decimal place.)
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was___________ %
and economic growth was______ %. (Give your answers to one decimal place.)
Answer:
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was 36.4%
and economic growth was 37.4%.
total nominal growth rate:
(15 - 11) / 11 = 0.3636 = 36.4%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 36.36% - (-3%) - 2% = 37.36%
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was -10%
and economic growth was -15%
total nominal growth rate:
(18 - 20) / 20 = -0.1 = -10%
economic growth = nominal GDP growth rate - change in price level - population growth rate = -10% - 3% - 2% = -15%
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was 25%
and economic growth was -6%.
total nominal growth rate:
(10 - 8) / 8 = 0.25 = 25%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 25% - 18% - 13% = -6%
If a firm's sales are $250,000 and its variable costs are $190,000, the contribution margin in dollars is:_______.
a. $440,000
b. $60,000
c. $190,000
d. $250,000
Answer:
b. $60,000
Explanation:
Given the following data;
Sales price = $250,000
Variable cost = $190,000
Contribution margin can be defined as the subtraction of variable cost from the sales price.
Mathematically, it given by the formula;
[tex] Contribution \; margin = sales \; price - variable \;cost[/tex]
[tex] Contribution \; margin = 250000 - 190000[/tex]
Contribution margin = 60,000
Therefore, the contribution margin in dollars is $60,000.
Michael bought stock in a large consumer products company. As a stockholder, he is prioritized in the distribution of a firm's dividends, but he doesn't have voting and control rights. What type of stockholder is Michael?
a. a common stockholder
b. a preemptive stockholder
c. a proxy stockholder
d. a secured stockholder
e. a preferred stockholder
Answer:
Preferred stockholder
Explanation:
Shareholders are investors that buy company shares in order to gain ownership in the company.
The company gives shareholders dividends on their shares owned out of profit.
Preferred stockholders are paid before other stockholders are settled.
However they do not have voting and controlling rights.
In the scenario above Michael is a preferred stockholder.
T. James, owner, invested $20,000 cash in Sustain Company in exchange for common stock. 2 The company purchased $13,000 of furniture made from reclaimed wood on credit. 3 The company paid $2,400 cash for a 12-month insurance policy on the reclaimed furniture. 4 The company billed a customer $12,000 in fees earned from preparing a sustainability report. 12 The company paid $13,000 cash toward the payable from the June 2 furniture purchase. 20 The company collected $12,000 cash for fees billed on June 4. 21 T.James invested an additional $19,000 cash in Sustain Company in exchange for common stock. 30 The company received $14,000 cash from a client for sustainability services for the next 3 months. Prepare general journal entries for the above transactions.
Answer:
Sustain Company
General Journal
1
Cash $20,000 (debit)
Common Stock $20,000 (credit)
Owner investment in the company
2
Office furniture $13,000 (debit)
Accounts Payable $13,000 (credit)
Wood furniture purchased on credit
3
Prepaid Insurance$2,400 (debit)
Cash $2,400 (credit)
Insurance paid in advance
4.
Accounts Receivable $12,000 (debit)
Service Revenue $12,000 (credit)
Services rendered on credit
12
Accounts Payable $13,000 (debit)
Cash $13,000 (credit)
Payment to suppliers
20
Cash $12,000 (debit)
Accounts Receivables $12,000 (credit)
Cash receipts from customers
21
Cash $12,000 (debit)
Common Stock $12,000 (credit)
Owners invest cash in exchange of common stock
30
Cash $14,000 (debit)
Deferred Revenue $14,000 (credit)
Cash received for services to be rendered
Explanation:
See journals and their narrations prepared above.
. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)
Question Completion:
Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 58,000 units and sold 54,000 units.
Manufacturing Variable costs per unit:
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
The company sold 40,000 units in the East region and 14,000 units in the West region. It determined that $320,000 of its fixed selling and administrative expense is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
Answer:
Diego Company
Difference = $170,000 - (72,000)
= $242,000
Explanation:
a)Data and Calculations:
Selling price = $76 per unit
Units sold = 54,000
Units produced = 58,000
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Variable costs per unit: $44
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
Cost of Production:
Under variable costing:
Variable cost per unit X Units produced
= $44 * 58,000 = $2,552,000
Cost of goods sold = $44 * 54,000 = $2,376,000
Cost of Ending Inventory = $44 * 4,000 = $176,000
Under Absorption costing:
(Variable manufacturing costs * Units produced) + Fixed manufacturing overhead
= $41 * 58,000 + $1,160,000
= $3,538,000
Product Cost per unit = $3,538,000/58,000 = $61
Cost of goods sold = $61 * 54,000 = $3,294,000
Ending Inventory = $61 * 4,000 = $244,000
Sales Revenue = $76 * 54,000 = $4,104,000
Income Statement Under Variable Under Absorption
Sales Revenue $4,104,000 $4,104,000
Cost of goods sold 2,376,000 3,294,000
Gross profit $1,728,000 $810,000
Fixed costs:
Manufacturing overhead $1,160,000
Selling and administrative 640,000 $640,000
Total fixed costs $1,800,000 $640,000
Net operating losses $72,000 $170,000
Difference = $170,000 - (72,000) = $242,000
ou can buy property today for $2.1 million and sell it in 6 years for $3.1 million. (You earn no rental income on the property.) a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
Answer:
PV= $1,657,386.6
Explanation:
Giving the following information:
Future Value (FV)= $3,100,000
Interest rate (i)= 11%
Number of periods (n)= 6 years
To calculate the present value of the selling price, we need to use the following formula:
PV= FV/(1+i)^n
PV= 3,100,000 / (1.11^6)
PV= $1,657,386.6
We sell to a customer paying with Visa and the fee is 2%. Part of the transaction would include a debit to:
Answer:
there are no available options, but the complete journal entry to record a credit card sale is:
Dr Cash account 98% of sale
Dr Credit card fees 2% of sale
Cr Sales revenue 100% of sale
Explanation:
Since VISA payments are automatic, you can debit cash directly. There is no need to debit accounts receivable and then once the payment is confirmed, debit cash. Some credit cards do not pay automatically, and in those cases you should debit accounts receivable.
Instead of credit card fees, some people use credit card discount, or credit card expense, but all these accounts are basically the same. They are all expense accounts.
Jeff Heun, president of Tamarisk Always, agrees to construct a concrete cart path at Dakota Golf Club. Tamarisk Always enters into a contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $37,200 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,300 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
Determine the transaction price that Ayayai Always should compute for this agreement. Determine the transaction price:
Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 83% and otherwise it will be finished 1 week late, determine the transaction price.
Answer:
A) Determine the transaction price that Tamarisk Always should compute for this agreement.
total transaction price = contract price ($183,000) + expected value of the bonus
expected value of the bonus:
$37,200 x 50% = $18,600
($37,200 - $9,300) x 30% = $8,370
($37,200 - $9,300 - $9,300) x 20% = $3,720
total = $30,690
total transaction price = $183,000 + $30,690 = $213,690
B) Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 83% and otherwise it will be finished 1 week late, determine the transaction price.
total transaction price = contract price ($183,000) + expected value of the bonus
expected value of the bonus:
$37,200 x 83% = $30,876
($37,200 - $9,300) x 17% = $4,743
total = $35,619
total transaction price = $183,000 + $35,619 = $218,619
What kind of externality is present in the market above? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a. Positive Consumption
b. Negative Consumption
c. Positive Production
d. Negative Production
Answer:
The correct answer is the option A: Positive Consumption.
Explanation:
To begin with, the name of "Externalities" in the field of economics refers to the situation in where an external party that it is outside a certain transaction receives a good or a bad contribution from that operation. That means that when in an economy a transaction between two parties affect a third one then an externality is having place and that could be a good or bad externality that can come from a consumption or from a service. Therefore that there are four types, positive consumption, positive production, negative production and negative consumption.
Dr. Lum teaches part-time at two different community colleges, Hilltop College and Serra College. Dr. Lum can teach up to 5 classes per semester. For every class taught by him at Hilltop College, he needs to spend 3 hours per week preparing lessons and grading papers, and for each class at Serra College, he must do 4 hours of work per week. He has determined that he cannot spend more than 18 hours per week preparing lessons and grading papers. If he earns $4,000 per class at Hilltop College and $4,200 per class at Serra College, how many classes should he teach at each college to maximize his income, and what will be his income
Answer:
2 classes at Hilltop, 3 classes at Serra; and $20,600
Explanation:
We can generate two equations from the problem
Equation 1: Dr. Lum can teach up to 5 classes per semester at both colleges. If 'h' represents the number of classes taken at Hilltop College, and 's', the number of classes taken at Serra College,
Equation 1 becomes: h + s = 5
Equation 2: Dr. Lum spends 3 hours per week preparing for Hilltop classes, and 4 hours for Serra classes, subject to a maximum of 18 hours per week.
Equation 2 becomes: 3h + 4s = 18
Now solving using substitution method,
We can derive an equation 3 from equation 1, as follows.
Equation 3: h = 5 - s.
Substituting equation 3 into equation 2, equation 2 becomes
3(5 - s) + 4s = 18
= 15 - 3s + 4s = 18
= 15 + s = 18
= s = 3.
With s = 3, using equation 3, h = 5 - 3 = 2.
Therefore, Dr. Lum should teach 2 classes at Hilltop, and 3 classes at Serra.
His income will be
$4,000 (2) + $4,200 (3)
= $20,600.
A company wants to analyze the following investment option using its rate of return. They use a MARR of 15% to determine whether something might be a good investment in this category. Calculate the accurate internal rate of return for the given cash flow as precisely as possible, interpolating as necessary. The MARR is a good starting point. Decide if the investment should be made
Remainder Part of Question:
Cash Flow
Initial Costs $365,000
Annual Benefits $90,000
Operation and Maintenance $15,000
Salvage Value $25,000
Lifetime in years 10 Years
Answer:
As the IRR > MARR, hence the investment is financially viable.
Explanation:
Find the attachment below:
Essco Inc., a calendar year taxpayer, made two asset purchases this year. The first purchase was equipment costing $836,000, and the second purchase was a machine costing $494,000. Both assets are 7-year recovery property. Essco placed the machine in service on June 21 and the equipment in service on October 14. How many months of MACRS depreciation is Essco allowed for each asset this year?
Answer:
Essco should depreciate the first asset using the half year convention, which establishes a 14.29%. Depreciation expense for year 1 = $836,000 x 0.1429 = $119,464.40 ≈ $119,464.
In order for the mid quarter convention to apply, the value of the second asset should represent at least 40% of Essco's depreciable basis, but in this case it represents only $494,000 / ($494,000 + $836,000) = 37%. Since the mid quarter convention doesn't apply, Essco can also use the half year convention to depreciate the second asset. Depreciation expense for year 1 = $494,000 x 0.1429 = $70,592.60 ≈ $70,593.
Explanation:
A company will generally try to use the highest deprecation rate that it can or is allowed to. In this case, the company could depreciate the second asset using the mid quarter depreciation, but the depreciation rate is much lower. The idea is to pay less taxes, and unless required by regulations, a company should always choose the legal way to pay less taxes.
An organization that is offering unique, superior products or services to a wide market is pursing a strategy of _________
a. focused differentiation.
b. diversification.
c. differentiation.
d. cost focus.
e. cost leadership.
Answer:
The right approach is Option c (differentiation ).
Explanation:
Differentiation extends to how an organization splits itself into main elements. For larger firms, this would be common, the larger a corporation expands, the further differentiated itself appears for becoming. Businesses with either a significant amount of separation offer a huge amount of influence on some of these distinct elements.The other options given weren’t relevant to the case in question. So, the answer above would be the right one.
Argent Corporation has $60 million in current liabilities, $150 million in total liabilities, and $210 million in total common equity; Argent has no preferred stock. Argent’s total debt is $120 million. What is the debt-to-assets ratio? What is the debt-to-equity ratio?
Answer and Explanation:
The computation is shown below
Debt to asset ratio is
= Total debt ÷ total asset
= $120 million ÷ ($150 million + $210 million)
= $120 million ÷ $360 million
= 0.33
And, the debt to equity ratio is
= Total debt ÷ total equity
= $120 million ÷ $210 million
= 0.57
We simply applied the above formula so that the correct value could come
And, the same is to be considered
CF Manufacturing purchased inventory for $5,300 and also paid a $280 freight in bill 2/10, net 30. CF Manufacturing returned 60% of the goods to the seller and paid the bill within the discount period. What is the final inventory cost
Answer: $2357.6
Explanation:
Purchased Inventory = $5300
Less: purchase return = 60% × $5300 = 0.6 × $5300 = $3180
Amount = $2120
Less: purchase discount = 2% × $2120 = 0.02 × $2120 = $42.4
Amount = $2077.6
Add: Freight in: $280
Final Inventory cost = $2357.6
Simpleton, Inc. budgeted a material cost of $10 per lb. They ended up purchasing 2,300 lbs at $16 per lb. and using 1,800 lbs for production. The material price variance is:
Answer:
Direct material price variance= $13,800 unfavorable
Explanation:
Giving the following information:
Simpleton, Inc. budgeted a material cost of $10 per lb.
Actual:
2,300 lbs at $16 per lb.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (10 - 16)*2,300
Direct material price variance= $13,800 unfavorable
You are a business owner of a firm that services trucks. A customer would like to rent a truck from you for one week, while you service his truck. You must decide whether or not to rent him a truck. You have an extra truck that you will not use for any other purpose during this week. This truck is leased for a full year from another company for $300/ week plus $.50 for every mile driven. You also have paid an annual insurance premium, which costs $50/ week to insure the truck. The truck has a full 100-gallon fuel tank. The customer has offered you $600 to rent the truck for a week. The price includes the 100 gallons of fuel that is in the tank. It also includes the 100 gallons of fuel that is in the tank. It also includes up to 500 miles of driving. The customer will pay $.50 for each additional mile that he drives above the 500 miles. You anticipate that the customer will bring back the truck with an empty fuel tank and will have driven more than 500 miles. You sell fuel to truckers at a retail price $4.00/gallon. Any fuel you sell or use can be replaced at a wholesale price of $3.25/gallon. The customer will rent a truck from another company if you do not accept the proposed deal. In either case, you will service his truck. You know the customer and are confident that he will pay all charges incurred under the agreement.
1. Should you accept or reject the proposed deal? Why, or why not? Show calculations.
2. Would your answer change if your fuel supplier limited the amount of fuel that you could purchase from him at the wholesale price? Explain.
Explanation:Given data:
Yearly lease from the company = $300/weekly +$.50 for every driven mile.
Annual insurance = $50/weekly.
Customer offer = $600 for a week ( 100 gallons of fuel in the truck inclusive).
Customer pays and additional $.50 for mile driven above 500.
Solution:
Cost of fuel in the truck
= 100 * $3.25
= $325.
Insurance cost = $50.
Total cost = $375.
Customer offer – total cost
= $600 – $375.
= $225.
1.The proposal should be accepted because even after deductions of the cost of running the truck, you are still left with $225 which doesn’t include the cost the customer would incite for driving above 500 miles.
2.No, as that would only have a little effect on the cost of running the truck. So my answer would still be same.
Assume the perpetual inventory method is used. 1) The company purchased $12,200 of merchandise on account under terms 2/10, n/30.2) The company returned $1,700 of merchandise to the supplier before payment was made.3) The liability was paid within the discount period.4) All of the merchandise purchased was sold for $18,400 cash. The amount of gross margin from the four transactions is:
Answer:
$8,110
Explanation:
The computation of the gross margin is shown below:
As we know that
Gross margin is
= Sales - cost of goods sold
where,
Sales is $18,400
And, the cost of goods sold is
= (Purchase - returns) × (1 - discount rate)
= ($12,200 - $1,700) × (1 - 0.02)
= $10,290
So, the gross margin is
= $18,400 - $10,290
= $8,110
