Answer:
1. C. c. material, machinery/equipment, manpower, and methods.
2. E. All are correct
Explanation:
1. The cause-and-effect diagram also known as the Ishikawa diagram is used by organizations to find out the likely causes of unwanted problems. This diagram traces the roots of problems and helps managers discover the potential causes of these problems. The four M's that form the bone of the diagram to which other causes are traced include the;
a. material, which is about the products used in the production process and potential problems that can be attributed to them.
b. machinery/equipment, which is about the plant and likely problems that can arise from their use.
c. manpower, which is about the personnel used in the production process, and,
d. methods, which is about the systems adopted by the organization.
2. A systematic approach to capacity decisions include;
a. Estimation of capacity requirements
b. Identification of gaps by comparing the expected requirements with available capacity.
c. Develop alternative plans and methods that would help to reduce the gaps.
d. Evaluate the alternatives taking into consideration their qualitative and quantitative attributes.
1. The "four Ms" of cause-and-effect diagrams are material, machinery/equipment, manpower, and methods. Thus, option C is correct.
2. A Systematic Approach to Capacity Decisions includes all of the options. Thus, option E is correct.
Due to the high demand for a given good or service on the market, firms often employ capacity management as a method to maximize production efficiency. Its objectives include locating and resolving manufacturing process bottlenecks and accelerating output through resource optimization and the removal of time and capacity restrictions.
It aids businesses in overcoming difficulties related to creating long-term organizational strategies, managing supply chain operations, and satisfying short- and medium-term client demand. In order to guarantee that it accomplishes the manufacturing output within the allotted time, an organization must analyze the availability of its resources while doing this. In sectors including manufacturing, retail, services, and information technology, this practice is widespread.
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Suppose Rocky Brands has earnings per share of $2.33 and EBITDA of $29.3 million. The firm also has 5.3 million shares outstanding and debt of $125 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a P/E of 12.9 and an enterprise value to EBITDA multiple of 7.1, estimate the Enterprise Value of Rocky Brands by using both multiples. Which estimate is likely to be more accurate?
Answer:
enterprise value to EBITDA.
Explanation:
The computation of the value of the stock using P/E ratio is shown below:-
Stock value = (P/E ratio × EPS) × Number of shares outstanding
= (12.9 × $2.33) × 5.3 million
= 159.3021 million
Now, the computation of the value of the stock using EBITDA multiple is shown below:-
Stock value = (EBITDA multiple × EBITDA) - Net debt
= (7.1 × $29.3 million) - $125 million
= 208.03 - $125 million
= 83.03
There is no equivalent corporate debt. It is easier to make a comparison at the operating level and thus a better measure of valuation is the enterprise value to EBITDA.
If it is determined that your procurement scenario will not be conducted using full and open competition you are prohibited from purchasing a non-domestic product.
A. True
B. False
Answer:
Correct answer:
A. True
Explanation:
When procurement of goods and services is to be made from another country, it is expected that, it should be open and done in full view showing other competitors. This is to prevent fraud, such as the marking up of the price of goods or outright false declaration of the procurement prices.
Alexander has been accepted as a freshman at a college two hundred miles from his home for the fall semester. Alexander's wealthy uncle, Michael, decides to give Alexander a car for Christmas. In November, Michael makes a contract with Jackson Auto Sales to purchase a new car for $18,000 to be delivered to Alexander just before the Christmas holidays, in mid-December. The title to the car is to be in Alexander's name. Michael pays the full purchase price, calls Alexander and tells him about the gift, and takes off for a six-month vacation in Europe. Is Alexander an intended third party beneficiary of the contract between Michael and Jackson Auto Sales
Answer:
Yes.
Alexander is an intended third party beneficiary of the contract between Michael and Jackson Auto Sales.
Explanation:
In the law of contracts, Alexander becomes a third-party beneficiary of the contract between Michael and Jackson Auto Sales, and he has the right to sue in the contract notwithstanding that he was not an active party to the contract. Some of the factors that may be present to show that a Alexander is an intended beneficiary are: (1) the contract's performance is rendered directly to Alexander; (2) Alexander has rights to control the details of the performance; or (3) there is an express designation in the contract, e.g. the title to the car is in Alexander's name.
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000,and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the depreciationamount in the thirdyear and the BV at the end of the fifth year of life by each of these methods:
Answer:
straight line depreciation:
depreciation expense per year, the same for every year = ($60,000 - $12,000) / 14 = $3,428.57
book value end of year 1 = $56,571.43
book value end of year 2 = $53,142.86
book value end of year 3 = $49,714.29
book value end of year 4 = $46,285.72
book value end of year 5 = $42,857.15
double declining balance:
deprecation expense year 1 = 2 x 1/14 x $60,000 = $8,571.43
book value end of year 1 = $51,428.57
deprecation expense year 2 = 2 x 1/14 x $51,428.57 = $7,346.94
book value end of year 2 = $44,081.63
deprecation expense year 3 = 2 x 1/14 x $44,081.63 = $6,297.38
book value end of year 3 = $37,784.25
deprecation expense year 4 = 2 x 1/14 x $37,784.25 = $5,397.75
book value end of year 4 = $32,386.50
deprecation expense year 5 = 2 x 1/14 x $32,386.50 = $4,626.64
book value end of year 5 = $27,759.86
sum of digits:
depreciable value = $60,000 - $12,000 = $48,000
total sum of digits = 120 years
deprecation expense year 1 = $48,000 x 15/120 = $6,000
book value end of year 1 = $54,000
deprecation expense year 2 = $48,000 x 14/120 = $5,600
book value end of year 2 = $48,400
deprecation expense year 3 = $48,000 x 13/120 = $5,200
book value end of year 3 = $43,200
deprecation expense year 4 = $48,000 x 12/120 = $4,800
book value end of year 4 = $38,400
deprecation expense year 5 = $48,000 x 11/120 = $4,400
book value end of year 5 = $34,000
Which of the following is a drawback faced by multinational enterprises (MNEs)pursuing an international strategy?
a. They cannot leverage their home-based core competencies in foreign markets.
b. They are highly affected by exchange rate fluctuations.
c. They have to be highly responsive to local needs and preferences.
d. They cannot reap the benefits of economies of scale due to their highly customized products.
Answer:
Option b. They are highly affected by exchange rate fluctuations.
Explanation:
international strategy can be defined simply as the means or strategy by which a firm sells its goods and services outside its domestic market. they helps by enabling firms to leverage their home-based core competencies in foreign markets.
A multinational enterprise (MNE) can be said to be a company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries and it can only pursue international strategy if only when it enjoys a large domestic market, strong reputation, and brand name. exchange rate fluctuations affects MNE pursuit of international strategy.
Leslie works as customer service representative for Lighthouse Point Lanterns. Her job is to fulfill customer orders and answer any questions that the customer may have. In order to ensure the best service possible, Lighthouse Point Lanterns makes test phone calls to their customer service representatives and rates their ability to correctly answer customer calls. If Leslie properly handles 80% of the test calls, she will receive a 20% bonus in her next pay check. This is an example of:_________.
Answer:
a performance reward.
Explanation:
A performance reward is a type of employee reward system. Companies generally reward employees in an attempt to motivate them to work more, harder or more efficiently. E.g. a company may reward salespeople that close 100 sales per week, regardless of the type of sales made. This type of reward is based on the gross amount of work carried out by the employee.
In Leslie's case, she is being rewarded for being an efficient employee. The parameter for measuring her efficiency is that 80% of the test calls that she makes are handed properly. She is not rewarded on the number of test calls, but instead on how she handled them.
This is an example of a performance reward if Leslie is going to be rewarded with a 20% bonus for handling 80% of the test calls.
A performance reward is a reward that a customer receives in an organization which is based on how well they have performed in the business.
The reward system here has stated that if Leslie is able to meet up with the target that the business has placed for her to reach she would be rewarded with a bonus of 20% when she receives her next salary.
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If an investor's aversion to risk increased, would the risk premium on a high beta stock increase by more or less than that of a low-beta stock? Explain.
Answer:
risk premium increases by more of the low - beta stock
A risk averse investor is an investor that avoids risk. if risk aversion increases, it means that the investor is more wary of risky investment.
Beta measures the volatility of a portfolio. the higher the volatility, the more risky the portfolio is.
risk premium measures the rate of return in excess of the risk free rate.
According to CAPM :
risk free rate + (beta x stock risk premium)
Beta is a multiplier of stock risk premium, so the higher the beta, the more there would be an increase in the stock risk premium
If a risk averse investor invests in a high beta stock, he would want extra or higher compensation for holding such a volatile stock. this extra compensation would be in the form of a higher risk premium.
Explanation:
A 4 year project has an annual operating cash flow of $55,000. At the beginning of the project, $4,600 in net working capital was required, which will be recovered at the end of the project. The firm also spend $23,100 on equipment to start the project. This equipment will have a book value of $4,940 at the end of the project, but can be sold for $5,880. The tax rate is 35 percent. What is the Year 4 cash flow?
a. $65,809
b. $63,422
c. $21193
d. $55,951
e. $65,151
Answer:Year 4 Cash flow =$65,151.----E
Explanation:
Salvage value of the equipment =$5,880
Book value at end of project before sale = $4,940
Gain on disposal = $940
tax gain non disposal = 35% of $940 =0.35 x 940= $329
Amount after tax salvage value = $5,880 - $329=$5,551
Year 4 Cash flow = Operating cash flow +Net working capital +Amount after tax salvage value = $55,000 + $4,600 +$5551= $65,151.
The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 21,000 shares authorized and 10,500 shares issued, 1,100 shares outstanding $105,000 Paid-in capital in excess of par value, common stock 51,000 Retained earnings 26,000 Treasury stock 12,760 Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:
Answer:
9,400 shares
Explanation:
Treasury stock is the difference between issued shares and outstanding shares.
Number of treasure shares = Number of issued shares - Number of outstanding shares
Number of treasure shares = 10,500 - 1,100
Number of treasure shares = 9,400 shares
Therefore, number of treasury shares is 9,400
A midyear burst of minimum-wage increases starts on July 1
On July 1, 2016, the minimum wage will increase in 14 U.S. cities, states and counties, and in the District of Columbia. In SanFrancisco, the minimum wage will rise to $13.00 by 2018.
Source: The Wall Street Journal, July 1, 2016
The rise in the minimum wage _______.
A. increases aggregate supply because when workers receive a higher wage rate, they work harder
B. decreases aggregate supply because firms' costs increase
C. creates a movement up along the aggregate supply curve because the price level rises
D. does not change aggregate supply because most people earn more than the minimum wage
Answer: B. decreases aggregate supply because firms' costs increase
Explanation:
The rise in the the minimum wage rate raise the production cost .
This tends to shift the aggregate supply curve leftwards because the profit margins of firm will decrease and that tends to decrease the production.( at each unite of production.)
Hence, the rise in the minimum wage decreases aggregate supply because firms' costs increase .
Therefore , the correct option is 'B'.
Margaret’s car loan statement said that she would pay $7,683.20 in interest for a 5-year loan at an interest rate of 9.8%. Assuming this is an example of simple interest, how much did Margaret borrow to buy the car?
Answer: $15680
Explanation:
Principal = Unknown
Time = 5 years
Rate = 9.8%
Simple interest = $7683.20
Simple interest= PRT/100
7683.20 = (P × 9.8 × 5)/100
7683.20 = 49P/100
Cross multiply
768320 = 49P
P = 768320/49
Principal = $15680
Margaret borrowed $15680 to buy the car.
Salud Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2017. (Amounts to be deducted should be indicated with a minus sign.)
Selected 2017 Income Statement Data Selected Year-End 2017
Net income $455,000 Accounts receivable increase $52,800
Depreciation expense 95,500 Prepaid expenses decrease 17,400
Gain on sale of machinery 26,300 Accounts payable increase 6,200
Wages payable decrease 2,100
Answer:
Cash flow from Operating Activities
Net income $455,000
Adjustments for non-cash items :
Depreciation expense $95,500
Gain on sale of machinery ($26,300)
Adjustment for Changes in Working Capital :
Increase in Accounts receivable ($52,800)
Decrease in Prepaid expenses $17,400
Increase in Accounts payable $6,200
Decrease in Wages payable $2,100
Net Cash from Operating Activities $497,100
Explanation:
The Indirect method adjusts the Profit before tax with the following items :
Non-cash items previously added or deducted from net incomeChanges in Working CapitalReady Company has two operating (production) departments: Assembly and Painting. Assembly has 280 employees and occupies 55,200 square feet; Painting has 120 employees and occupies 36,800 square feet. Indirect factory expenses for the current period are as follows: Administration $ 86,000 Maintenance $ 102,000 Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The total amount of indirect factory expenses that should be allocated to the Painting Department for the current period is:
Answer:
$61,200
Explanation:
Maintenance expenses allocated to assembly department
Allocation base = Square footage
= $102,000 * $55,200 / ($55,200 + $36,800)
= $102,000 * $55,200 / $92,000
= $61,200
A corporation is attempting to sell additional shares to its existing shareholders through a rights distribution. A shareholder who wishes to subscribe must send the purchase amount with the rights certificate to the:
Answer:
Right agent.
Explanation:
A rights agent is said to be a correlative junction, serve and also seen to be an obedient mediator and right assistance between his client and any form of third party organisation or also other clients. A right agent is sometimes seen to be reliable to a principal when he/she acts without actual authority, but with apparent authority. He is also held responsible for indemnify and also principal loss or damage resulting from his/her act. He is also keen and careful in his advise and dealing on behalf of his client is he owes certain contractual duties to his/her agent as he protect him also from wrong claims, expenses that are not worthwhile, liabilities etc.
It costs your company $240 to produce pens and pencils together. To produce the same amount of pens and pencils separately costs $100 for the pens and $120 for the pencils. The production of pens and pencils exhibits:_______
a. diseconomies of scope
b. economies of scope.
c. increasing returns to scale.
d. constant returns to scale.
Answer:
b
Explanation:
Problem 24-01 Liquidation Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed assets 1,875,000 Notes payable 750,000 Subordinated debentures 750,000 Total debt $1,875,000 Common equity 1,875,000 Total assets $3,750,000 Total liabilities and equity $3,750,000 The trustee's costs total $276,250, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $4 million is received from sale of the assets? Distribution of proceeds on liquidation: 1. Proceeds from sale of assets $ 2. First mortgage, paid from sale of assets $ 3. Fees and expenses of administration of bankruptcy $ 4. Wages due workers earned within 3 months prior to filing of bankruptcy petition $ 5. Taxes $ 6. Unfunded pension liabilities $ 7. Available to general creditors $ Distribution to general creditors: Claims of General Creditors Claim (1) Application of 100% Distribution (2) After Subordination Adjustment (3) Percentage of Original Claims Received (4) Notes payable $ $ $ % Accounts payable $ $ $ % Subordinated debentures $ $ $ % Total $ $ $ The remaining $ will go to the common stockholders.
Answer:
1. Proceeds from sale of assets $ 4,000,000
2. First mortgage, paid from sale of assets 0.00
3. Fees and expenses of administration of bankruptcy 276,250
4. Wages due workers earned within 3 months prior to filing of bankruptcy petition 0.00
5. Taxes 0.0
6. Unfunded pension liabilities 0.00
7. Available to general creditors $3,723,750
Distribution to general creditors
Claim (1) =$1,875,000
Application of 100% Distribution(2)=$1,875,000
After Subordination Adjustment
(3)=$1,875,000
Percentage of Original Claims Received
(4)=$1,875,000
Explanation:
Calculation for how much will each class of investors receive if a total of $4 million is received from sale of the assets
1. Proceeds from sale of assets $ 4,000,000
2. First mortgage, paid from sale of assets 0.00
3. Fees and expenses of administration of bankruptcy 276,250
4. Wages due workers earned within 3 months prior to filing of bankruptcy petition 0.00
5. Taxes 0.00
6. Unfunded pension liabilities 0.00
7. Available to general creditors $3,723,750
Distribution to general creditors:
Claims of General Creditors
Notes payable
Claim (1) 750,000
Application of 100% Distribution
(2) 750,000
After Subordination Adjustment
(3) 750,000
Percentage of Original Claims Received
(4) 100%
Accounts payable
Claim (1) 375,000
Application of 100% Distribution
(2) 375,000
After Subordination Adjustment
(3) 375,000
Percentage of Original Claims Received
(4) 100%
Subordinated debentures
Claim (1) 750,000
Application of 100% Distribution
(2) 750,000
After Subordination Adjustment
(3) 750,000
Percentage of Original Claims Received
(4) 100%
TOTAL
Claim (1) $750,000+ 375,000+750,000=$1,875,000
Application of 100% Distribution
(2)$750,000+ 375,000+750,000=$1,875,000
After Subordination Adjustment
(3)$750,000+ 375,000+750,000=$1,875,000
Percentage of Original Claims Received
(4)$750,000+ 375,000+750,000=$1,875,000
"A husband and wife wish to open an account that allows either party to trade or draw checks; and that becomes the property of the surviving spouse if one should die. The proper ownership form is:"
Answer:
Joint Tenants with Rights of Survivorship
Explanation:
The property ownership form that is being mentioned in the question is known as Joint Tenants with Rights of Survivorship . As described, this is when two individuals share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Rights of Survivorship means that if one of the individual joint tenants dies then their ownership of the property does not pass on to the next of kin but instead is passed to the other joint tenant that is the beneficiary.
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent’s cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay (reservation value): adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent’s demand is:
Answer:
There is some information missing, and when I looked for it I found similar questions but the demand was already given and the question was about Vincent's total daily income.
Passenger Price Daily demand
Adults $18 70
Children $10 25
Senior citizens $12 55
total 150
total revenue per day = ($18 x 70) + ($10 x 25) + ($12 x 55) = $1,260 + $250 + $660 = $2,170
total operating costs per day = (150 / 50) x $450 = $1,350
operating income per day = $2,170 - $1,350 = $820
The manager of a crew that installs carpeting has tracked the crew’s output over the past several weeks, obtaining these figures:
Week Crew Size Yards Installed
1 4 97
2 3 71
3 4 98
4 2 54
5 3 63
6 2 52
a. Compute the labor productivity for each of the weeks. (Round your answers to 2 decimal places.)
Week Crew size Labor productivity
(Yards/Person)
1 4
2 3
3 4
4 2
5 3
6 2
b. Which crew size works best?
Answer:
a. Labor productivity is calculated as: Labor productivity = Total Yards Installed / Total Crew Size
Hence, the labor productivity for each week is;
Week 1 = 97 / 4 = 24.25
Week 2 = 71 / 3 = 23.67
Week 3 = 98 / 4 = 24.5
Week 4 = 54 / 2 = 27
Week 5 = 63 / 3 = 21
Week 6 = 52 / 2 = 26
b. A crew of size 2 works the best as they generate the highest labor productivity of 27. The crew with highest number generate a labor productivity of 24.5
Current cost to source from the home plant to Country A is $0.55 per unit, plus $0.02 in shipping (there is no tariff). If product is sourced from Country B, manufacturing cost is expected to be 20% lower; but shipping will increase to $0.06, and there is a tariff of 15% on CIF. What will the savings be on 100 million units if sourcing for Country A switches from the home plant to Country B
Answer:
Cost savings in sourcing from Country A = $0.5 million ($57.5 - $57 million)
Explanation:
Sourcing from Country A:
Purchase price = $0.55 per unit
Shipping = $0.02
Total Cost = $0.57
Cost of 100 million units = $57 million
Sourcing from Country B:
Purchasing price = $0.44 ($0.55 x 80%)
Shipping = $0.06
CIF Tariff = 15% = $0.075 ($0.5 x 15%)
Total Cost = $0.575
Cost of 100 million units = $57.5 million
Sourcing from Country A is more beneficial than sourcing from Country B with reduced product cost, but increased shipping and additional tariff. Whereas Country A gives a total cost for 100 million units of $57 million, sourcing the same units from Country B gives a total cost of $57.5 million. The savings of $0.5 million is substantial that no company would like to lose unless the goods from Country B are of higher quality than those from Country A.
Broad network access, measured service, resource pooling, and rapid elasticity are essential characteristics of ___________.
Answer:
cloud computing
Explanation:
All of these characteristics alongside on-demand self-service are essential characteristics of cloud computing. Cloud computing refers to the different computer system resources that are always available to a client when needed from any remote location, usually in regards to data storage and computing power, without actual direct active involvement by the user themselves. Allowing the user to access information or computing power remotely.
Quality improvement teams are groups of people from various work areas who define, analyze, and solve common production problems.
a. True
b. False
Answer: True
Explanation:
The quality improvement teams are groups of employees that are from various departments who come together and meet regularly in order to define, analyze, and then solve common production problems.
The aim of the quality improvement team is to improve the production process. This is achievable by them working on their methods.
Assume Division 1 of the XYZ Company had the following results last year. Sales $5,000,000 Operating income 1,000,000 Total assets (average) 10,000,000 Current liabilities 500,000 Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. What is the division's economic value added?
Answer:
Economic Value was $130,000
Explanation:
As we know that:
Economic Value Added = Net Operating Income after tax - (WACC * Capital Employed)
Here
Operating Income After Tax is $700,000 (Step1)
WACC is 6%
Capital Employed is $9,500,000 (Step2)
By putting values, we have:
EVA = $700,000 - 9,500,000 * 6%
EVA = $700,000 - $570,000
EVA = $130,000
Step1: Operating Income After Tax
Simply deduct the 30% tax share from the operating income to arise at Net Operating Income After Tax.
Mathematically,
Net Operating Income After Taxes = Operating Income *(1 - Tax Rate)
Here
Operating Income is $1,000,000
Tax Rate is 30%
By putting values, we have:
Net Operating Income After Taxes = $1,000,000 * (1 - 30%)
Net Operating Income After Taxes = $700,000
Step2: Capital Employed
Capital Employed = Total Assets - Current Liabilities
Capital Employed = $10,000,000 - $500,000
Capital Employed = $9,500,000
Additional short-term borrowings $ 20,000
Purchase of short-term investments 5,000
Cash dividends paid 16,000
Interest paid 8,000
Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Cash flow from from financing activities = $(4,000)
Explanation:
The cash flow from financing activities includes that entails any or a combination of the following; issuance and redemption of stocks , issuance and redemption of debts and payment of interest and/or dividend, and receipt of dividend and or interest.
Kindly note that the purchase of short term investment is not a financing activity but rather an investing activity
Cash flow $
Short term borrowing 20,000
Cash dividend paid (16,000)
Interest paid (8,000)
Total Cash flow (4000)
Cash flow from from financing activities = $(4,000)
Chester currently has $17,624 (000) in cash and management has decided to issue stocks and bonds worth an additional $8,000 (000). Assuming that cash from operations will be the same for each of the following activities, which activity exposes this company to the most risk of being issued an emergency loan?
a) purchasing $18,000 (000) worth of plant and equiptment
b) liquidate the new inventory
c) retiring the oldest bond
d) a $5 dividend
Answer: a) purchasing $18,000 (000) worth of plant and equipment
Explanation:
Of the 4 options listed, liquidating the new inventory would lead to a cash inflow and so is not going to lead to an emergency loan.
Retiring the oldest bond is something that would probably have been budgeted for so it will be less probable to cause Chester to seek emergency funding.
The activity that poses the greatest threat to Chester in terms of loan solicitation would be the purchase of plant and equipment. This would have less chance of being budgeted for and is a significant amount to leave the company which is even larger than the company's current cash amount. It has a higher chance of causing Chester to seek emergency loan funding.
Cullumber Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 14,700 of the assembly part at $6 per unit. If the offer is accepted, Cullumber will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Cullumber will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer and Explanation:
The preparation of the analysis that depicts the total cost saving is presented below:
Particulars Make Buy Net Income or decrease
Variable
Manufacturing Cost $73,500 - $73,500
(14,700 × $5)
Fixed
Manufacturing cost $29,400 $29,400 -
(14,700 × $2)
Purchase price
(14,700 × $6) - $88,200 ($88,200)
Total annual cost $102,900 $117,600 ($14,700)
Based on the total annual cost the company should make the product as it saves the cost by $14,700
Blossom Street Inc. makes unfinished bookcases that it sells for $57. Production costs are $37 variable and $10 fixed. Because it has unused capacity, Blossom Street is considering finishing the bookcases and selling them for $70. Variable finishing costs are expected to be $6 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Blossom Street should sell unfinished or finished bookcases. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer and Explanation:
The Preparation of an analysis on a per unit basis is shown below:-
Particulars Sell unfinished Sell finished Increase/Decrease
bookcases bookcases in income
Sale price per
unit $57 $70 $13
Less: variable cost
per unit $37 $43 $6
($37 + $6)
Les: fixed cost per
unit $10 $10 $0
Total cost per
unit $47 $53 $6
Net income per
unit $10 $17 $7
Therefore, Unfinished bookcases are further processed, as net profit per unit increases further by processing by $7
You have just been instructed to develop a schedule for introducing a new product into the marketplace. Below are the elements that must appear in your schedule. Arrange these elements into a work breakdown structure (down through level 3), and then draw the arrow diagram. You may feel free to add additional topics as necessary.1. Production layout2. Market testing3. Review plant cost4. Select distributors5. Analyze selling cost6. Analyze customer reactions7. Storage and shipping cost8. Select salespeople9. Training salespeople10. Trained distributors
Answer:
Attached below is the arrangement of these elements with additional topics and arrow diagram
Explanation:
The given Elements are : Production layout , market testing , Review plant cost, select distributors, Analyze selling cost, Analyse customer reactions, storage and shipping cost, select salespeople, training sales people, trained distributors. including additional topics as well
Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara’s home. Is this possible?
Answer: Yes it's possible as long as Tom and Sara gives a written consent to the dual agency arrangement.
Explanation:
From the question, we are informed that Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara’s home.
This is possible as long as Tom and Sara gives a written consent to the dual agency arrangement.
You are planning to save for retirement over the next 30 years. To do this, you will invest $900 a month in a stock account and $600 a month in a bond account. The return of the stock account is expected to be 8 percent, and the bond account will pay 5 percent. When you retire, you will combine your money into an account with a return of 6 percent. How much can you withdraw each month from your account assuming a 15-year withdrawal period
Answer:
$15,533.69
Explanation:
the future value of your stock account = $900 x 1,490.48048 (FV annuity factor, 0.6667%, 360 periods) = $1,341,432.43
the future value of your bond account = $600 x 832.32019 (FV annuity factor, 0.4167%, 360 periods) = $499,392.11
after 30 years, the balance of your 2 accounts = $1,840,824.54
the monthly withdrawal = $1,840,824.54 / 118.50531 (PV annuity factor, 0.5%, 180 periods) = $15,533.69
