Answer:
$196.91
Explanation:
The computation of the current value is shown below:
D1 = ($2.4 × 1.17) = 2.808
D2 = ($2.808 × 1.17) = 3.28536
D3 = (3.28536 × 1.17) = 3.8438712
D4 = (3.8438712 × 1.17) = 4.4973293
Now
Value after year 4 is
= (D4 × Growth rate) ÷ (Required return - Growth rate)
= (4.4973293 × 1.06) ÷ (0.079 - 0.06)
= 250.903635
Now the current value is
= Future dividend and value × Present value of discounting factor
=$2.808 ÷ 1.079 + 3.28536 ÷ 1.079^2 + 3.8438712 ÷ 1.079^3 + 4.4973293 ÷ 1.079^4 + 250.903635 ÷ 1.079^4
= $196.91
The perfect rose co has earning of 1.55 per share. The benchmark pe for the company is 11. What stock price would you consider appropriate?
Answer:
$17.05
Explanation:
The perfect rose corporation has a earnings of $1.55
The benchmark PE ratio is 11
Therefore the stock price can be calculated as follows
= bench mark PE × EPS
= 11 × 1.55
= $17.05
Hence the stock price to be considered appropriate is $17.05
Pamela and Amanda form Pansy Corporation. Pamela transfers land (basis of $40,000 and fair market value of $90,000) for 50 shares plus $10,000 cash. Amanda transfers $80,000 cash for 50 shares in Pansy Corporation. a. Pamela’s basis in the Pansy Corporation stock is $40,000. b. Pansy Corporation’s basis in the land is $40,000. c. Pansy Corporation’s basis in the land is $90,000. d. Pamela recognizes a gain on the transfer of $50,000. e. None of the above.
Answer:
c. Pansy Corporation’s basis in the land is $90,000.
Explanation:
Journal Debit Credit
Land Account $90,000
To share capital $80,000
(50 Shares at $80000)
To cash $10,000
GAAP require that a business to record an exchange of stock for property at the fair or market value of the transaction. Hence, one can use either the market value of the common stock or the market value of the land.
Pine Street Inc. makes unfinished bookcases that it sells for $58.51. Production costs are $37.56 variable and $9.67 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $70.45. Variable finishing costs are expected to be $8.41 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer:
The book case should be processed further
Explanation:
Sell Option Process Further Increase/Decrease
Sales per unit $58.51 $70.45 $11.94
Cost per unit:
Variable $37.56 $45.97 ($8.41)
Fixed $9.67 $9.67 $0
Total cost $47.23 $55.64 ($8.41)
Net income per unit $11.28 $14.81 $3.53
Conclusion: The book case should be processed further as its Net Income per unit is higher than if the Pine street should sell.
The writing voice or tone of writing may be any of the following:
(Select all that apply)
A. Grammatically Incorrect
B. Professional
C. Incomplete
D. Friendly
Answer:
- Professional
- Friendly
Explanation:
Both of those tone can be used depending on the intent of the writing.
If the purpose of the writing is to talk about serious business transaction, it would be best to use a professional tone in order to shows a high level of competence. This will increase people's trust in your capability.
If the purpose of the writing is to seek semi-casual relations (such as building a network with other people within the industry), it would be best to use a friendly tone in the writing in order to establish a social relationship.
ere are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales $
888.00
Cost of goods sold
748.00
Depreciation
38.00
Earnings before interest and taxes (EBIT) $
102.00
Interest expense
19.00
Income before tax $
83.00
Taxes
17.43
Net income $
65.57
BALANCE SHEET
(Figures in $ millions)
End of Year Start of Year
Assets
Current assets $
376
$
326
Long-term assets
272
229
Total assets $
648
$
555
Liabilities and shareholders’ equity
Current liabilities $
201
$
164
Long-term debt
115
128
Shareholders’ equity
332
263
Total liabilities and shareholders’ equity $
648
$
555
The company’s cost of capital is 8.5%.
a. Calculate Watervan’s economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
b. What is the company’s return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)
d. Is the company creating value for its shareholders?
Answer:
its wap aka W A P
Explanation:
Waterway Company sold 10,100 Super-Spreaders on December 31, 2020, at a total price of $1,050,400, with a warranty guarantee that the product was free of any defects. The cost of the spreaders sold is $535,300. The assurance warranties extend for a 2-year period and are estimated to cost $37,000. Waterway also sold extended warranties (service-type warranties) related to 1,800 spreaders for 2 years beyond the 2-year period for $10,800. Given this information, determine the amounts to report for the following at December 31, 2020: sales revenue, warranty expense, unearned warranty revenue, warranty liability, and cash. Amounts Reported in Income Sales revenue $ Warranty Expense Amounts Reported on the Balance Sheet Unearned Service Revenue $ Cash Warranty Liability
Answer:
Amounts Reported in Income
Particulars Amount
- Sales revenue $1,050,400
- Warranty expenses $37,000
Amounts Reported on the Balance Sheet
Particulars Amount
- Unearned service revenue $10,800
- Cash ($1,050,400 + $10,800) $1,061,200
- Warranty Liability $37,000
Depending on the type of hotel, housekeeping associates typically service between _____________ rooms per day: a. 10 and 15 b. 15 and 20 c. 20 and 25 d. 25 and 30
Answer:
b. 15 and 20
Explanation:
Given that an average housekeeper needs about fifteen to thirty minutes to clean a room during a shift. And the work time always happen when hotel visitors are out of their rooms for activities, or they elapsed their duration. Also, noting that a shift for housekeeper is at average of eight to ten hours.
Hence, depending on the type of hotel, housekeeping associates typically service between fifteen to twenty rooms per day which equates to average of 5 - 6 hours full of work.
A company distributes a product that sells for $50 per unit. Variable expenses are $10 per unit, and fixed expenses total $15,000 annually. Assume that the company sold 4,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising expenditures, would increase annual unit sales by 50%. If these changes were made, by how much would net operating income increase or decrease?
Answer:
Income will increase by $20,000.
Explanation:
First, we need to calculate the current income:
Current income= 4,000*(50 - 10) - 15,000= $145,000
Now, the new selling price, fixed costs, and sales in units:
Selling price= 50*0.9= $45
Fixed costs= $45,000
Sales= 4,000*1.5= 6,000
New income= 6,000*(45 - 10) - 45,000= $165,000
Difference= 165,000 - 145,000= 20,000
Income will increase by $20,000.
Amortization Expense For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A patent with a 10-year remaining legal life was purchased for $350,000. The patent will be commercially exploitable for another eight years. A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $52,300 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 10 years and is currently worth $400,000. A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for five years was obtained at a cost of $70,000. Satisfactory sales performance over the five years permits renewal of the franchise for another three years (at an additional cost determined at renewal). General Journal Ref. Description Debit Credit a. Answer Amortization Expense - Patents Answer 43,750 Answer Answer Patents Answer Answer 43,750 To record patent amortization. b. Answer Amortization Expense - Patents Answer 5,230 Answer Answer Patents Answer Answer 5,230 To record patent amortization. c. Answer Amortization Expense - Patents Answer 14,000 Answer Answer Patents Answer Answer 14,000 To record franchise amortization.
Answer:
A. Dr Amortization expense $43,750
Cr Patents $43,750
B. Dr Amortization expense $5,230
Cr Patents $5,230
C. Dr Amortization expense $14,000
Cr Franchises $14,000
Explanation:
Preparation of Journal entries
A. Dr Amortization expense $43,750
($350,000÷8 years = $43,750)
Cr Patents $43,750
(To record paten Amortization expense)
B. Dr Amortization expense $5,230
($52,300÷10 years = $5,230)
Cr Patents $5,230
(To record patent Amortization expense)
C. Dr Amortization expense $14,000
($70,000÷5 years = $14,000)
Cr Franchises $14,000
(To record Franchises Amortization expense)
The journal entries for each transaction is given below.
Journal entries;A)
Amortization expense $43750 ( $350000/8 )
Patent $43750
Here expense is debited as it increased the expense and credited the patent as it decreased the assets.
B)
Amortization expense $5230 ( $52300/10 )
Patents $5230
Here only the original cost of patent should be amortized
Here expense is debited as it increased the expense and credited the patent as it decreased the assets.
C)
Amortization expense $14000 ( $70000/5)
Franchise $14000
Here expense is debited as it increased the expense and credited the franchise as it decreased the assets.
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Mo has a credit card that gives a 3% discount on every purchase. The annual percentage rate on the card is 12%. He is purchasing an electronic reader for $140. Check all that apply. If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $140. If Mo pays cash, the cost of the purchase will be $140. If Mo uses the credit card and pays off the balance at $30 a month for 7 months with no late fees, the cost of the purchase will be $143.34. If Mo pays cash, the cost of the purchase will be $135.80. If Mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89. If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80.
Answer:
B: If Mo pays cash, the cost of the purchase will be $140.
E: If Mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89.
F: If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80.
The correct answers to this question are B, E, and F and they are also
answers 2, 5, and 6.
Based on the information given, the correct options will be:
If Mo pays in cash, the cost of the purchase will be $140. If Mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89. If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80.It should be noted that when she pays in cash, she'll have to pay $140. In a situation whereby she uses the credit card, she'll be given a discount of 3%. Therefore, the amount that she'll have to pay will be:
= $140 - (3% × $140)
= $140 - (0.03 × $140)
= $140 - $4.20
= $135.80.
In conclusion, the correct options are B, E, and F.
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Max Weber argued that formal organizations were efficient, but he cautioned that they can have harmful effects on people. As he saw it, what is the danger?
a. Organizations create social inequality.
b. Organizations create conflict among workers.
c. Organizations create alienation.
d. Organizations create conformity.
Answer:
Organization create alienation
Explanation:
We are informed about how Max Weber argued that formal organizations were efficient, but he cautioned that they can have harmful effects on people.
In this case, As he saw it, the danger is Organization create alienation.Organization create alienation do occur in an organization where the workers/Employees of the organization and the organization herself have different views. This when employees is with aims/expectations concerning the organization, but in this scenario the organization has something different such as centralization of authority.
Whenever there is alienation in particular workplace, people become meaningless and powerless.
Suppose that Sophia expects to serve 15 percent more meals in the next quarter. Unit variable costs are expected to remain unchanged. However, Sophia knows that if the restaurant serves over 5,500 meals in a quarter, she must hire an additional manager (part-time) at a cost of $6,450 for the quarter. Other fixed costs are expected to increase by 10 percent. Calculate the unit cost and the total cost if 5,750 meals are served next quarter
Answer:
$87,975
15.30
Explanation:
The computation of unit cost and total cost is shown below:-
Managers' salary ($22,000 + $6,450) $28,450
Rent $18,000
Depreciation on equipment $2,000
Other fixed cost (3,000 × 1.1) 3,300
Total Fixed cost $51,750
Total Cost = $36,225 + $51,750
= $87,975
Unit Cost = 87,975 ÷ 5,750
= 15.30
How would you do it? What sampling technique would you use to select the sample for the study? Why?
Answer:
Sampling Method in Research Methodology; How to Choose a Sampling Technique for Research. Hamed Taherdoost.
Clearly Define. Target Population.
Select Sampling. Frame.
Choose Sampling. Technique.
Determine. Sample Size.
Collect Data.
Assess. Response Ra
Explanation:
D0 is currently $3.00, Ke is 8 percent, and g is 5 percent. Under Plan A, D0 would be immediately increased to $3.40 and Ke and g will remain unchanged. Under Plan B, D0 will remain at $3.00 but g will go up to 6 percent and Ke will remain unchanged. a. Compute P0 (price of the stock today) under Plan A. Note D1 will be equal to D0 × (1 + g) or $3.40 (1.05). Ke will equal 8 percent, and g will equal 5 percent. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
a.
P0 = 3.4 * (1+0.05) / (0.08 - 0.05)
P0 = $119
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
Do is dividend today g is the growth rate r is the required rate of returna.
P0 = 3.4 * (1+0.05) / (0.08 - 0.05)
P0 = $119
Examples of how to improve perceptual acuity include: A. A CEO meets with other CEOs of non-competing companies to examine the world from multiple perspectives and then shares the results with his own management team. B. A CEO meets with the company management team regularly to analyze current world events and their potential impact on the company. C. A CEO meets with direct competitors to analyze current industry trends. The CEOs share their conclusions with their respective companies. D. Outsiders are brought in to the board meeting to critique the company strategy, which considers the new information in its potential revamping of the strategy.
Answer:
The answer is "Option C".
Explanation:
It was its human detector for seeing confusion through the fog because you can respond until others use it. Only a tiny portion of future executives look in and peek over the horizon towards their businesses from the outside to collect signs that could be bringers of shift.
It is also known as the psychological or mental preparedness throughout the external environment that can "see around corners" and spot potentially important phenomena, inconsistencies, and oddities before the others do. To see through all the fog of doubt, it is a radar. so, that you can act first, that's why the choice c is correct.
e market for iPhones, the following two changes take place: (1) the cost of making iPhones rises, and (2) customers begin to prefer Android-platform smartphones over iPhones. What happens to equilibrium price and equilibrium quantity
Answer: The equilibrium price is indeterminate, but the equilibrium quantity falls.
Explanation:
As a result of the cost of iPhones rising, the production and supply for iPhones will decrease in the market to save costs. This will cause the supply curve to shift to the left.
With customers preferring android to iPhones, the demand for iPhones will decrease which will shift the demand curve left as well.
Looking at the graph attached, notice how when both supply and demand shift left at the same time, equilibrium quantity will reduce and equilibrium price however will remain indeterminate and dependent on the magnitude of the shift.
If the interest rate this year is 8.8% and the interest rate next year will be 10.8%, what is the future value of $1 after 2 years? What is the present value of a payment of $1 to be received in 2 years?
Answer:
Results are below.
Explanation:
Giving the following information:
The interest rate this year is 8.8% and the interest rate next year will be 10.8%.
a) To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV1= 1*1.088= 1.088
FV2= 1.088*1.108=$1.206
b) To calculate the present value, we need to use the following formula:
PV=FV/(1+i)^n
PV2= 1/1.108= 0.903
PV1= 0.903/1.088= $0.83
Target Profit Outdoors Company sells a product for $110 per unit. The variable cost is $65 per unit, and fixed costs are $288,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $54,720.
Answer:
Results are below.
Explanation:
Giving the following information:
Target Profit Outdoors Company sells a product for $110 per unit. The variable cost is $65 per unit, and fixed costs are $288,000.
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= 288,000 / (110 - 65)
Break-even point in units= 6,400
Now, we incorporate the desired profit in the formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (288,000 + 54,720) / 45
Break-even point in units= 7,616 units
Bob has been investing $4,000 in stock at the end of every year for the past 8 years. If the account is currently worth $45,000, what was his annual return on this investment?a. 10.61%b. 10.91%c. 8.81%d. 9.55%e. 9.07%
Answer:
d. 9.55%
Explanation:
we can use the future value of an annuity formula to calculate Bob's annual return:
future value = annual contribution x FV annuity factor
future value = $45,000
annual contribution = $4,000
FV annuity factor = ?
FV annuity factor = future value / annual contribution = $45,000 / $4,000 = 11.25
FV annuity factor = [(1 + i)ⁿ - 1] / i
11.25 = [(1 + i)⁸ - 1] / i
11.25i = (1 + i)⁸ - 1
solving this problem is really complicated, but there is a much simple way to do it:
e) 11.25 x 0.0907 = (1 + 0.0907)⁸ - 1
1.020375 ≠ 1.0028
d) 11.25 x 0.0955 = (1 + 0.0955)⁸ - 1
1.0744 = 1.0744 ⇒ this option is correct
Assume we are looking at the electric car market. How would a major increase in gas price affect this market?
Answer:
Demand increases
Explanation:
There are replacements for petrol and electric vehicles. So, as petrol prices grow, sales of electric vehicles will grow. Market curve will move to the right and that both prices and quantities will rise.
Brad will graduate next year. When he begins working, he plans to deposit $6000 at the end of each year into a retirement account that pays 6% interest. How much will be in his account after 40 deposits
Answer:
$92,8571.7937
Explanation:
The computation of the amount after 40 deposits is shown below:
= (((1 + interest rate)^number of years - 1) ÷ interest rate)× principal
= (((1 + 0.06)^40-1) ÷ 0.06) × $6,000
= $92,8571.7937
We simply applied the above formula and the same is to be considered
We considered all the things given in the question
At a sales volume of 44,000 units, Thoma Corporation's sales commissions (a cost that is variable with respect to sales volume) total $585,200. To the nearest whole cent, what should be the total sales commission per unit at a sales volume of 46,300 units
Answer: $13.30 per unit
Explanation:
Thoma Corporation Sales Commission per unit;
= Total Sales commission/ Sales volume
= 585,200/44,000
= $13.30
For a sales volume of 46,300 units, the commission per unit will be the same $13.30 per unit as this cost is variable with respect to sales volume.
The state of the economy alone can predict how the financial market will perform.
True
False
Answer:
true
Explanation:
Tahani and Chidi produce ties and belts, Chidi can produce a maximum of 120 ties or 40 belts and
Tahani can produce 90 ties or 60 belts. They decide to specialize in their respective comparative
advantage of production, and they agree to trade at a rate of 2 ties = 1 belt. If Chidi agrees to trade
50 ties with Tahani, which of the following represents Tahani's PPF and what she can have after
trade?
Based on the information given regarding the opportunity cost, it should be noted that at the end, Tahani will have 50 ties and 35 belts. Therefore, the correct option that illustrates this is graph B.
How to solve the opportunity cost.From the complete question, it should be noted that the opportunity cost of ties for Chidi will be:
= 40/120 = 0.33
The opportunity cost of belts for Chidi will be:
= 120/40 = 3
The opportunity cost of ties for Tahani will be:
= 60/90 = 0.67
The opportunity cost of belts will be:
= 90/60 = 1.5
Therefore, Chidi has a compative advantage in the production of ties while Tahani has a comparative advantage in the production of belts.
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Osgood Company, which applies overhead at the rate of 190% of direct material cost, began work on job no. 101 during June. The job was completed in July and sold during August, having accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the basis of this information, the total overhead applied to job no. 101 amounted to:
Answer: $51300
Explanation:
From the question, we are informed that Osgood applies overhead at rate of 190% of direct cost material and we've been given the direct cost material as $27, 000. Therefore, the total overhead applied to the job will be:
= $27000 × 190%
= $27000 × 1.9
= $51300
The Cash account of Security Systems reported a balance of at , . There were outstanding checks totaling and a 31 deposit in transit of . The bank statement, which came from Cities Bank, listed the balance of . Included in the bank balance was a collection of on account from , a customer who pays the bank directly. The bank statement also shows a service charge and of interest revenue that earned on its bank balance. Prepare 's bank reconciliation at 31.
Answer:
Follows are the solution to this question:
Explanation:
please find the attached file.
A lawn company intends to use the sales of lawn fertilizer to predict the sales of lawn mower. The store manager estimates a probable six-week lag between fertilizer sales and mower sales. The pertinent data are
Answer:
Period ; Fertilizer ; Sales
1 ; 1.6 ; 10
2; 1.3 ; 8
3; 1.8 ; 11
4; 2.0 ; 12
5; 2.2 ; 12
6; 1.6 ; 9
7; 1.5 ; 8
8; 1.3 ; 7
9; 1.7 ; 10
10; 1.2 ; 6
Explanation:
Correlation is 0.960
R-Squared is 0.921
This is positive correlation which means both variables will move in same direction.
Slope is 6.153
Intercept is -0.649
Regression line will be formed with x intercept as fertilizers and y intercept as Lawn Mowers sold.
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $2.00 coming 3 years from today. The dividend should grow rapidly - at a rate of 80% per year - during Years 4 and 5. After Year 5, the company should grow at a constant rate of 5% per year. If the required return on the stock is 13%, what is the value of the stock today (assume the market is in equilibrium with the required return equal to the expected return)
Answer:
The answer is "$ 52.17"
Explanation:
Third-year dividend, [tex]D_3 = \$ \ 2.00[/tex] Increasing at [tex]80 \ \%[/tex] per year in years 4 and 5.
[tex]\to D_4 = 2.00(1.80)=3.6\\\\\to D_5 = 3.6 (1.80) = 4.48\\\\[/tex]
Now, rising at a steady rate of 5 percent per year in year 6
[tex]\to D_6 = 6.48(1.05) =6.804[/tex]
[tex]\text{Price of the stock} = \frac{Expected \ dividend}{(Required \ return - growth \ rate)}[/tex]
[tex]=\frac{6.804}{(0.13 - 0.05)}\\\\ =\frac{6.804}{(0.08)}\\\\ = \$ \ 85.05[/tex]
The present value of all flows of cash:
[tex]= \frac{2.00}{(1.13)^3} + \frac{3.6}{(1.13)^4} + \frac{(4.48+ 85.05)}{(1.13)^5}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(4.48+ 85.05)}{1.84243518}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(89.53)}{1.84243518}\\\\= 1.38 +2.20+ 48.59\\\\=52.17[/tex]
, manufactures lead crystal glasses. 's managers recently calculated the following:Variances after completing production of glasses:Direct materials cost varianceDirect labor cost varianceDirect materials efficiency varianceDirect labor efficiency varianceRead the requirementsLOADING....Requirement 1. For each variance, who in 's organization is most likely responsible?Direct materials cost varianceDirect materials efficiency varianceDirect labor cost varianceDirect labor efficiency varianceRequirement 2. Interpret the direct materials and direct labor variances for 's management.The direct materials cost variance indicates that the actual direct materials cost per pound was▼morelessthan the standard cost per pound. This▼decreasedincreased's operating income by .The direct materials efficiency variance indicates that the actual pounds used was▼lessmorethan the total pounds allowed to manufacture the glasses. This▼decreasedincreased's operating income by .The direct labor price variance means that 's employees were paid▼lessmoreper hour than budgeted. This▼decreasedincreased's operating income by .The direct labor efficiency variance means that it actually took▼morefewerdirect labor hours than were budgeted to produce glasses. This▼increaseddecreased's operating income by .
Full question attached
Answer and Explanation:
Direct material cost variance-
Purchasing
Direct material efficiency variance-
Production
Direct labor cost variance- Human Resources
Direct labor efficiency variance-Production
The $1650 favorable direct material cost variance indicates that actual direct materials cost per pound was less than standard cost per pound. This increased Martin Inc's operating income by 1560.
Therefore Martin Inc bought lower than they normally purchase raw materials(pounds) which invariably increased profit(operating income)
The 650 unfavorable Direct Materials efficiency variance indicates that the actual pounds used was more than the total pounds allowed to manufacture 6500 glasses. This decreased Martin Inc's operating income by $650.
Efficiency was low as more materials were used than planned, therefire more cost and less profit
The $9100 favorable direct labor price variance means that Martin Inc's employees were paid less than budgeted. This increased Martin Inc's operating income by $9100.
Employees(labour) cost lower than expected hence higher profit(operating income)
The $11,700 favouravle direct labor efficiency variance means that it actually took fewer direct labor hours than were budgeted to produce 6500 glasses. Thus increased Martin Inc's operating income by $11,700.
Labour hours were lower than expected hence less cost more profit
Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.40 per card, and the cost of printing is $0.10 per card. The company receives $3.75 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,300 and standard deviation 200. (Assume these four are independent.)
What is the optimal production quantity for the card?
Answer:
≈ 9644 quantity of card
Explanation:
given data:
n = 4 regions/areas
mean demand = 2300
standard deviation = 200
cost of card (c) = $0.5
selling price (p) = $3.75
salvage value of card ( v ) = $ 0
The optimal production quantity for the card can be calculated using this formula below
= u + z (0.8667 ) * б
= 9200 + 1.110926 * 400
≈ 9644 quantity of card
First we have to find u
u = n * mean demand
= 4 * 2300 = 9200
next we find the value of Z
Z = ( [tex]\frac{p-c}{p-v}[/tex] )
= ( 3.75 - 0.5 ) / 3.75 = 0.8667
Z( 0.8667 ) = 1.110926 ( using excel formula : NORMSINV (0.8667 )
next we find б
б = 200[tex]\sqrt{n}[/tex] = 400
