Answer:
$300
Explanation:
From Equipment Account we get :
Cost of Equipment Sold = $12,000 - $8,200 = $3,800
From Accumulated Depreciation Account we get :
Accumulated Depreciation = $2,200 + $1,200 - $2,700 = $700
Using Amounts above to prepare a Disposal Account - Equipment we get :
Cash Proceeds = $3,800 - $700 - $2,800 = $300
Conclusion
The selling price of the equipment $300
Job 243 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 51,870 Direct labor-hours 435 labor-hours Direct labor wage rate $ 11 per labor-hour Machine-hours 516 machine-hours Number of units completed 3,300 units The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job. (Round your answer to 2 decimal places.)
Answer:
$19.20
Explanation:
Computation for the unit product cost that would appear on the job cost sheet for this job.
First step is to compute the Total Product cost
Job 243
Direct material $ 51,870
Direct labor (435*11) 4,785
Overhead (516*13) 6,708
Total Product cost $63,363
Now let Compute the unit product cost
Unit product cost=$63,363/3,300 units
Unit product cost =$19.20
Therefore the unit product cost that would appear on the job cost sheet for this job is $19.20
A trading company on April 30, paid BD 750,000 for a machine which can produce 1,400,000 units in 10 years life. The machine have a salvage value of BD 50,000 and produce 25,000 units in first year, 45,000 units in second year and 70,000 units in third year. Compute depreciation expense for the Second year assuming the company uses the unit production method. O A. 22500 O B. 35000 O C. 12500 O D. 15000
Answer: A. BD 22,500
Explanation:
First find the depreciation per unit:
= (Cost of machine -Salvage value) / Total units to be produced over lifetime
= (750,000 - 50,000) / 1,400,000
= BD 0.5 per unit
There are 45,000 units to be produced in the second year:
= 45,000 * 0.5
= BD 22,500
At Oldies but Goodies, a store that buys and sells vintage record albums, there is only one general partner, Alexa. She spends all her time running the business and makes all the decisions. Alexa's mother and brother put up money for her to buy the store, but they work full time at other jobs and have no management say in the running of Oldies but Goodies; they, however, share in some of the profits. This is an example of a
Answer: limited partnership
Explanation:
A limited partnership is a form of partnership whereby there are two partners which are the general partner and the limited partner.
In this scenario, the general partner who is Alexa in this case, own and operate the business, and makes all the decisions while the limited partners
who are Alexi's mother and brothers invest in the business but won't make any decisions. Also, the general partner will have an unlimited liability.
if you calculating the simple interest and you are given the time in months. how can you find the time in years
Answer:
Divide the months by 12
Explanation:
What does storytelling do?
The bargaining leverage of suppliers is greater when: A. only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes. B. industry members incur low costs in switching their purchases from one supplier to another. C. industry members purchase in large quantities and thus are important customers of the suppliers. D. it makes good economic sense for industry members to vertically integrate backward. E. the supplier industry is composed of a large number of relatively small suppliers.
Answer:
A.)only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.
Explanation:
The Bargaining leverage of Suppliers, can be regarded as one out of the forces described in Porter's Five Forces of framework, it can be defined as the pressure that can be put on companies by suppliers through raising their prices as well as reduction in availability of their products. Even quality lowering. It should be noted that The bargaining leverage of suppliers is greater when only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go-karts: Deluxe and Basic. Activity Expected Costs Expected Activity Handling materials $ 625,000 100,000 parts Inspecting product 900,000 1,500 batches Processing purchase orders 105,000 700 orders Paying suppliers 175,000 500 invoices Insuring the factory 300,000 40,000 square feet Designing packaging 75,000 2 models Required: 1. Compute a single plantwide overhead rate for the year, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 2. In January of this year, the Deluxe model required 2,500 direct labor hours and the basic model required 6,000 di
Answer:
Results are below.
Explanation:
First, we need to calculate the plantwide predetermine manufacturing overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
total estimated overhead costs for the period= (625,000 + 900,000 + 105,000 + 175,000 + 300,000 + 75,000)
total estimated overhead costs for the period= $2,180,000
Predetermined manufacturing overhead rate= 2,180,000 / 125,000
Predetermined manufacturing overhead rate= $17.44 per direct labor hour
Now, we can allocate overhead to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Deluxe:
Allocated MOH= 17.44*2,500
Allocated MOH= $43,600
Basic:
Allocated MOH= 17.44*6,000
Allocated MOH= $104,640
A manufacturer of programmable calculators is attempting to determine a reasonable free- service period for a model it will introduce shortly. The manager of product testing has indicated that the calculators have an expected life of 30 months. Assume product life can be described by an exponential distribution.
a. If service contracts are offered for the expected life of the calculator, what percentage of those sold would be expected to fail during the service period?
b. What service period would result in a failure rate of approximately 10 percent?
Answer:
a. P(failure before T) = 1 - e^(-(T/MTBF)).................(1)
Where e = value obtained from table, T = Length of service before failure, MTBF = 30, Mean time before failure = 30 months
P = 1 - e^(-(T/MTBF))
P = 1 - e^(-(30/30))
P = 1 - 0.3679
P = 0.6321
So, 63.21% of sold product would all during the service period if service contracts are offered for expected life of the calculator
b. Here, the value of P is given. P = 10% = 0.10
1 - e^(-(T/MTBF)) = 0.10
e^(-(T/30) = 0.90
T/30 = 0.10
T = 0.10*30
T = 3 months
So, the service period would be 3 month that result in failure rate of 10%
Selected balance sheet information for the Wolf Company at November 30, and December 31, 2018, is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit.
Nov. 30 Dec. 31
Debits Credits Debits Credits
Accounts receivable 9,900 2,900
Prepaid insurance 4,900 7,400
Inventory 6,900 5,900
Accounts payable 11,900 14,900
Salaries and wages payable 4,900 2,900
The following cash flow information also is available:
A. Cash collected from credit customers, $79,000.
B. Cash paid for insurance, $4,900.
C. Cash paid to suppliers of inventory, $59,000 (the entire accounts payable amounts relate to inventory purchases).
D. Cash paid to employees for salaries and wages, $9,900.
Required:
1. Determine the following for the month of December:
2. Prepare summary journal entries to record the month’s sales and cost of those sales.
Determine the following for the month of December:
a. Sales revenue
b. Cost of goods sold
c. Insurance expense
d. Salaries and wages expense
Answer:
Wolf Company
1. Determining the following for the month of December:
a. Sales Revenue = $72,000
b. Cost of goods sold = $63,000
c. Insurance Expense = $2,400
d. Salaries & Wages Expense = $11,900
2. Journal Entries to record the month's sales and cost of sales:
Debit Accounts Receivable $72,000
Credit Sales Revenue $72,000
To record the sales for the month of December.
Debit Cost of Goods Sold $63,000
Credit Inventory $63,000
To record the cost of goods sold for the month of December.
Explanation:
a) Data and Calculations:
List of balances:
Nov. 30 Dec. 31
Debits Credits Debits Credits
Accounts receivable 9,900 2,900
Prepaid insurance 4,900 7,400
Inventory 6,900 5,900
Accounts payable 11,900 14,900
Salaries and wages payable 4,900 2,900
Transactions:
A. Cash $79,000 Accounts Receivable $79,000
B. Prepaid insurance $4,900 Cash $4,900
C. Accounts payable $59,000 Cash $59,000
D. Salaries & Wages Payable $9,900 Cash $9,900
T-accounts:
a. Sales Revenue:
Accounts receivable
Accounts Titles Debit Credit
Beginning balance 9,900
Sales revenue 72,000
A. Cash 79,000
Ending balance 2,900
b. Cost of goods sold
Accounts Payable
Accounts Titles Debit Credit
Beginning balance 11,900
Cash 59,000
Purchases 62,000
Ending balance 14,900
Cost of goods sold:
Inventory
Accounts Titles Debit Credit
Beginning balance 6,900
Purchases 62,000
Cost of goods sold 63,000
Ending balance 5,900
c. Insurance Expense:
Prepaid Insurance
Accounts Titles Debit Credit
Beginning balance 4,900
Cash 4,900
Insurance expense 2,400
Ending balance 7,400
Salaries & Wages Expense
Salaries & Wages Payable
Accounts Titles Debit Credit
Beginning balance 4,900
Cash 9,900
Salaries and Wages 11,900
Ending balance 2,900
Which of the following statements is true of financial leverage
Below are cash transactions for Goldman Incorporated, which provides consulting services related to mining of precious metals.
a. Cash used for purchase of office supplies, $1,450.
b. Cash provided from consulting to customers, $41,100.
c. Cash used for purchase of mining equipment, $64,000.
d. Cash provided from long-term borrowing, $51,000.
e. Cash used for payment of employee salaries, $23,100.
f. Cash used for payment of office rent, $11,100.
g. Cash provided from sale of equipment purchased in c. above, $21,600.
h. Cash used to repay a portion of the long-term borrowing in d. above, $35,500.
i. Cash used to pay office utilities, $3,400.
j. Purchase of company vehicle, paying $9,100 cash and borrowing $14,100
Required:
Calculate cash flows from investing activities.
Answer:
-$51,500
Explanation:
Calculation for cash flows from investing activities
Cash used for purchasing mining equipment -64,000
Cash provided from sale of equipment $21,600
Purchase of company vehicle -$9,100
Cash used by investing activities -$51,500
Therefore the cash flows from investing activities will be -$51,500
Match each business structure with the scenario that illustrates it.
Tiles
sole proprietorship
corporation
limited liability corporation
partnership
Pairs
Bob just finished school in auto mechanics. He and two
of his friends graduated at the top of their class and
made several good contacts in their community. They
just purchased a garage and plan to open their own
shop. They meet daily to decide how many employees
they need, how they will advertise, and how they will
divide the profits.
Sandra worked as a nurse in a major hospital for 20
years. She enjoyed her work, and was good at it, but
she didn’t like how short-term stays didn’t give her the
opportunity to help her patients with their health care
over time. She decides to start a home health care
business. Because she is well known as an excellent
nurse, Sandra has had no trouble finding eight patients
whom she visits daily to monitor their ongoing health.
She has decided to use her initial profits to buy a van so
she can transport medical equipment to patients when
needed.
Anita and Marco own three popular restaurants. They
are doing well financially but lately have begun to
worry about lawsuits because of food poisoning. It
seems that bacteria such as E.coli are in the news
quite often. Anita and Marco know that none of their
children want to take over the business when they
retire, and they have no interest in selling stock in
their business. They decide to transition their business
to a business structure that better meets their needs.
The Anderson sisters have built their 10 athletic stores
from the ground up. They know that the concept for
their stores is successful and have plans to expand
even urther. But they need money and professional
advice. The sisters decide to restructure their business
so they will be able to eventually sell stock and have
more people to advise them.
Answer:
Sample Answer
Explanation:
Selected balance sheet and income statement information for EKG Corporation and AMP Company follows ($ millions). Company EKG Corp AMP Company 2017 Sales $37,006 47,409 2017 NOPAT $1,292 1,716 2017 Net Operating Assets $10,007 8,781 Compute the 2017 net operating asset turnover (NOAT) for each company. A) EKG NOAT: B) AMP NOAT: Page 7 of 17 2016 Net Operating Assets $9,437 7,818
Answer:
See below
Explanation:
Net operating asset turnover ratio is computed as;
= Net sales / Average net operating assets
Company EKG Corp.
Net operating asset turnover ratio = $37,006 / [($1,292 + $10,007)/2]
= $37,006 / $5,650
= 6.55
Corp AMP Company
Net operating asset turnover ratio = $47,409 / [($1,716 + $8,781)/2]
=$47,409 / $6,107
= 7.76
You deposit $1,800 at the end of each year into an account paying 10.6 percent interest.
a. How much money will you have in the account in 16 years?
Answer:
4852.80
Explanation:
1800×10.6%= 190.80 / year
190.80 × 16 years = 3052.80
3052.80 + 1800=
4852.80
Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 2,434 Direct labor-hours 72 labor-hours Direct labor wage rate $ 14 per labor-hour Machine-hours 132 machine-hours The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $15 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be:
Answer:
$5,422
Explanation:
The computation of the total cost that should be recorded is shown below:
= Direct material cost + direct labor cost + manufacturing overhead cost
= $2,434 + (72 labor hours × $14) + (132 machine hours × $15)
= $2,434 + $1,008 + $1,980
= $5,422
hence, the total cost is $5,422
Assume Concord Corporation has the following reported amounts: Sales revenue $1,000,000, Sales returns and allowances $29,000, Cost of goods sold $657,367, and Operating expenses $215,600. (a) Compute net sales. Net sales $enter net sales in dollars (b) Compute gross profit. Gross profit $enter gross profit in dollars (c) Compute income from operations. Income from operations $enter Income from operations in dollars (d) Compute the gross profit rate. (Round answer to 1 decimal place, e.g. 25.2%.)
Answer:
Concord Corporation
(a) Net sales $971,000
(b) Gross profit $313,633
(c) Income from operations $98,033
(d) Gross profit rate = 313,633/971,000 * 100
= 32.3
Explanation:
a) Data and Calculations:
Sales revenue $1,000,000
Sales returns and allowances $29,000
Net Sales $971,000
Cost of goods sold $657,367
Gross profit 313,633
Operating expenses $215,600
Income from operations $98,033
You have recently been made a department head of the new regional office. In getting to know your departmental staff, you have noticed that one of your inexperienced employees is not following through on assigned tasks. She is enthused about her new job and wants to get ahead in the organization. Which alternative represents the most effective leadership style?
Answer:
Democratic leadership style
Explanation:
She can develop a democratic leadership style within her which can help her accomplish her tasks as a manager and also help her inculcate this very leadership style which can be beneficial for her to go higher the ladder in organizations management.
Democratic leadership style would help her show the inexperienced employee some route out to get skilled and follow subordinates to improve work. Collaborative working with the employees provides managers with much needed team dynamics. Also, democratic leadership styles makes managers gather much needed skills which are essential for the leaders of the organization.
Bank Reconciliation and Entries
The cash account for Collegiate Sports Co. on November 1, 20Y9, indicated a balance of $81,145. During November, the total cash deposited was $293,150, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on November 30, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
hecks outstanding totaled $41,840.
A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.
A check for $7,250 had been incorrectly charged by the bank as $2,750.
A check for $760 returned with the statement had been recorded by Collegiate Sports Co. as $7,600. The check was for the payment of an obligation to Ramirez Co. on account.
The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.
Bank service charges for November amounted to $125.
A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.
Required
Collegiate Sports Co.
Bank Reconciliation
November 30, 20Y9
Cash balance according to bank statement $
Adjustments:
Deposit of November 30, not recorded by bank $
Bank error in charging check as $7,250 instead of $2,750
Outstanding checks
Total adjustments
Adjusted balance $
Cash balance according to company's records $
Adjustments:
Proceeds of note collected by bank, including $385 interest $
Error in recording check as $7,600 instead of $760
Check returned because of insufficient funds
Bank service charges
Total adjustments
Adjusted balance $
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound entry, if an amount box does not require an entry, leave it blank.
20Y9 Nov. 30 Cash
Notes Receivable
Interest Revenue
Accounts Payable-Ramirez Co.
Nov. 30 Accounts Receivable-Hallen Academy
Miscellaneous Expense
Cash
3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 20Y9, what amount should be reported as cash?
$\
Answer:
1. Collegiate Sports Co.
Bank Reconciliation
November 30, 20Y9
Cash balance according to bank statement $112,675
Adjustments:
Deposit of November 30, not recorded by bank $12,200
Bank error in charging check as ($4,500)
$7,250 instead of $2,750
Outstanding checks ($41,840)
Total adjustments ($34,140)
Adjusted balance $78,535
Cash balance according to company's records $66,935
($81,145+$293,150-$307,360)
Adjustments:
Proceeds of note collec. Date ted by bank, $7,385
including $385 interest
Error in recording check as $7,600 instead of $760 $6,840
Check returned because of insufficient funds ($2,500)
Bank service charges ($125)
Total adjustments $11,600
Adjusted balance $78,535
2. Date Account Titles Debit Credit
Nov 30 Cash $14,225
Notes receivables $7,000
Interest revenue $385
Account payable $6,840
Nov 30 Account Receivable $2,500
Miscellaneous expenses $125
Cash $2,625
3. The cash to be reported is $78,535.
Analyse, using a production possibility curve (PPC) diagram, the effect of an increase in enterprise on an economy.
Answer:
Describe economic growth using a PPC diagram.
Explanation:
Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy given the resources and technology which are constant and fully utilized. Therefore to achieve any point beyond PPC, there is need for increase in the present supply of resources and technology which leads to an outward shift in PPC as overall production increases which results in economic growth as shown in the diagram.
(Please heart the answer if you find it helpful, it's a motivation for me to help more people)
The production possibility curve, diagram illustrates the effect of an increase in enterprise on an economy as progressive if the quality and output are balanced.
What is the economy?The economy of any country is determined by the ratio of production and consumption that takes place within a year and evaluates the flow of funds in the market by analyzing the purchasing parity of an individual.
The production possibilities curve (PPC) is a graph that displays all the possible output combinations. when a nation's economy is operating at peak performance, generating goods and services for the general public while allocating resources most effectively.
An increase in the enterprise means requiring more numbers of laborers and employees to work which shows the availability of employment which results in an increase in purchasing parity of an individual and helps in improving the economy.
Learn more about the production possibility curve, here:
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Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below. Type A Type B Type C Total 5,000 units $ 4 $ 9 $ 4 $ 17 7,500 units 4 6 3 13 If Shum produces 10,000 units, the total cost would be:
Answer:
For making 10,000 units
Type A cost = 40,000
Type B Cost = 90,000
Type C Cost = 25,000
Explanation:
Given - Shum Manufacturing, which uses the high-low method, makes a
product called Kwan. The company incurs three different cost
types (A, B, and C) and has a relevant range of operation between
2,500 units and 10,000 units per month. Per-unit costs at two
different activity levels for each cost type are presented below.
Type A Type B Type C Total
5,000 units $4 $9 $4 $17
7,500 units $4 $6 $3 $13
To find - If Shum produces 10,000 units, the total cost would be ?
Proof -
As we know that
Total cost = Variable cost per unit × Units + Fixed Cost
Now,
As per the question ,
Highest Activity unit = 7,500 units
Lowest Activity unit = 5,000 units
Now,
Variable cost per unit = Change in cost / Change in activity unit
= ( Highest Activity cost - Lowest Activity cost ) / ( Highest Activity unit - Lowest Activity unit )
Type A Type B Type C
Highest Activity Cost 30,000 45,000 22,500
Lowest Activity Cost 20,000 45,000 20,000
Variable Cost Per unit 4 0 1
Fixed Cost 0 90,000 15,000
Now,
Statement Showing Total Cost for 10,000 units
Particulars Type A Type B Type C
Variable Cost 40,000 0 10,000
Fixed Cost 0 90,000 15,000
Total 40,000 90,000 25,000
∴ we get
For making 10,000 units
Type A cost = 40,000
Type B Cost = 90,000
Type C Cost = 25,000
The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $64,000 and $99,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $11,000. During the year, Grecco and Rosenfeld withdrew $43,000 and $53,000, respectively, and net income for the year was $84,000. Revenues were $654,000, and expenses were $570,000. The articles of partnership make no reference to the division of net income.
Answer:
Requirement: Journalize the entry to close the revenues and expenses. If an amount box does not require an entry, leave it blank. Lorraine Grecco, Capital Carrie Rosenfeld, Capital Journalize the entry to close the drawing accounts. If an amount box does not require an entry, leave it blank
Account Titles Debit Credit
Revenues $654,000
Expenses 570,000
Lorraine Grecco, Capital $42,000
Carrie Rosenfeld ,Capital $42,000
Lorraine Grecco, Capital $43,000
Carrie Rosenfeld ,Capital $53,000
Lorraine Grecco, Drawing $43,000
Carrie Rosenfeld ,Drawing $53,000
First National Bank charges 13.7 percent compounded monthly on its business loans. First United Bank charges 14 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) As a potential borrower, which bank would you go to for a new loan
Answer:
14.59%
14.49%
Explanation:
Effective annual interest (EAR) = (1 + periodic interest)^m - 1
where m = number of compounding
periodic interest = APR / m
(1 + 0.137/12)^12 - 1 = 14.59%
(1 + 0.14/2)^2 - 1 = 14.49%
Roquan, a single taxpayer, is an attorney and practices as a sole proprietor. This year, Roquan had net business income of $90,000 from his law practice (net of the associated for AGI self-employment tax deduction). Assume that Roquan pays $40,000 in wages to his employees, has $10,000 of property (unadjusted basis of equipment he purchased last year), and has no capital gains or qualified dividends. His taxable income before the deduction for qualified business income is $100,000.
1. Calculate Roquan's deduction for qualified business income.
2. Assume the same facts as earlier, except Roquan's taxable income before the deduction for qualified business income is $300,000.
Answer:
A. $18,000
B. No QBI deduction
Explanation:
a) Calculation for Roquan’s deduction for qualified business income.
Using this formula
Roquan's qualified business income.
= 20% x QBI
Let plug in the formula
Roquan's qualified business income
= 20% x $90,000
Roquan's qualified business income= $18,000
Therefore Roquan’s deduction for qualified business income will be $18,000
b) Based on the information given if we assumed that Roquan's taxable income before the deduction for qualified business income is the amount of $300,000 which means that Roquan's income is higher than the amount of $213,300 hence, NO qualified business income deduction (QBI) will be allowed.
Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $2,512,000, or it can make annual payments of $289,600 for 15 years, each payment due on the last day of the year. Click here to view factor tables Which method of payment do you recommend, assuming an expected effective interest rate of 8% during the future period
Answer:
pay $289,600 for 15 years
Explanation:
we have to compare the present value of both options:
option 1:
pay $2,512,000 immediately, with the same present value
option 2:
pay $289,600 for 15 years
PVIFA, 15 periods, 8% = 8.5595
PV of hte annuity = $289,600 x 8.5595 = $2,478,831
they should choose the second option since the present value is lower.
Which of these is a renewable marine resource that could be utilized to produce electricity?
Answer:
Hydro energy
Explanation:
Hydro energy is a renewable marine resource that can be used to generate electricity.
It is derived from a dam that enables the formation of a controlled flow of water that will steer a turbine, thereby generating electricity.
Another renewable marine resource is Tidal energy that uses tidal currents to propel turbine generators in generating electricity.
. A company has just been taken over by new management that believes it can raise earnings before taxes (EBT) from $600 to $1,000
At which stage does advertising catch the attention of customers by building awareness of the product
Answer:
when there is an entry of a substitute product in the market. This is the right time that customers attention need to be fully caught. When there is a general decline in the sell of the product. Advertisement is necessary.
Explanation:
Eddie is a production engineer for a major supplier of component parts for cars. He has determined that a robot can be installed on the production line to replace one employee. The employee earns $20 per hour and benefits worth $8 per hour for a total annual cost of $58,240 this year. Eddie estimates this cost will increase 6% each year. The robot will cost $16,500 to operate for the first year with costs increasing by $1500 each year. The firm uses an interest rate of 15% and a 10-year planning horizon. The robot costs $75,000 installed and will have a salvage value of $5000 after 10 years. Should Eddie recommend that purchase of the robot
Answer:
Eddie should recommend the purchase of the robot.
Explanation:
This can be determined using the following 3 steps:
Step 1: Calculation of the present worth (PW) of the cost of one employee
This can be calculated using the formula for calculating the the present value (PV) of a growing annuity as follows:
PWE = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (1)
Where;
PWE = Present worth of the cost of one employee = ?
P = first or this year annual cost = $58,240
r = interest rate = 15%, or 0.15
g = annual growth rate of cost of the one employee = 6%, or 0.06
n = number of years = 10
Substituting the values into equation (1), we have:
PWE = ($58,240 / (0.15 - 0.06)) * (1 - ((1 + 0.06) / (1 + 0.15))^10) = $360,654.33
Step 2: Calculation of the present worth (PW) of the cost of the robot
This can be calculated using the following formula:
PWR = C + ((P / (r - g)) * (1 - ((1 + g) / (1 + r))^n)) - (SV / (1 + r)^n) .................... (2)
Where;
PWR = Present worth of the cost of the robot = ?
C = cost of installing the robot = $75,000
P = first year cost of operating the robot = $16,500
r = interest rate = 15%, or 0.15
g = annual growth rate of cost of operating the robot = Annual increase in cost / P = $1500 / $16,500 = 0.0909090909090909
n = number of years = 10
SV = Salvage value = $5,000
Substituting the values into equation (2), we have:
PWR = $75,000 + (($16,500 / (0.15 - 0.0909090909090909)) * (1 - ((1 + 0.0909090909090909) / (1 + 0.15))^10)) - (SV / (1 + 0.15)^10) = $188,227.75
Step 3: Recommendation
PWE = Present worth of the cost of one employee = $360,654.33
PWR = Present worth of the cost of the robot = $188,227.75
Since present worth of the cost of the robot of $188,227.75 is lower than the present worth of the cost of one employee of $360,654.33, Eddie should recommend the purchase of the robot.
Cover Me, Inc. sells umbrellas in three cities. Management assumes that annual rainfall is the primary determinant of umbrella sales, and it wants to generate a linear regression equation to estimate potential sales in other cities. Given the data below, what is the estimated amount of sales for 96 inches of rain utilizing a linear regression equation? Round to nearest whole number.
Rainfall in X Sales in Dollars of Umbrellas
City A 35 2800
City B 30 2000
City C 12 800
Answer:
7602.28
Explanation:
Given the data:
Rainfall in X Sales in Dollars of Umbrellas
City A 35 2800
City B 30 2000
City C 12 800
Using the linear regression calculator :
The linear model obtained for the data is :
y = - 226.424 + 81.549x
Using the model, the predicted sales for 96 inches of rain will be:
X = 96
y = - 226.424 + 81.549(96)
The predicted sales is 7602.28
The government passes a new investment tax credit initiative. Which input in the production function changes, and what is the effect on economic growth in the country? The capital stock decreases, and economic growth is negatively affected. Technological advance occurs, but there is no effect on economic growth. The capital stock increases, and economic growth is positively affected. Human capital is enhanced, and economic growth is positively affected.
Answer: The capital stock increases, and economic growth is positively affected.
Explanation:
If the government offers an investment tax credit, a situation will arise where entities will invest more knowing that they do not have to pay as much in taxes.
This investment will lead to an increase in capital stock as this is what investment purchases to enable production. With more capital stock, production levels will rise and the economy will grow.
